Last month, Milford had a $281 million mandate New Zealand active equity mandate suspended while it is investigated for alleged market manipulation.

NZ Super Fund has been managing the funds internally since.

Spokeswoman Catherine Etheredge said the investment management agreement would remain in place with Milford. “We continue to monitor the situation and update our view of the manager and underlying investment opportunity over time. The manager does not receive fees during the suspension. We like to have the flexibility to dial our investment mandates up and down, while keeping the contractual arrangements and relationship ‘infrastructure’ in place. This means we can respond quickly to changing circumstances, such as a deterioration in a underlying investment opportunity.”

She said suspensions were agreed on after considering what the Guardians of New Zealand Superannuation thought of the manager, the investment opportunity, how the opportunity should be accessed and the flexibility of the contract.

“The situation with Milford is unusual. We want to ensure any decisions we make about our manager relationships are based on good, accurate information. Given that the FMA’s investigation has not been concluded, and that the facts of the matter are not clear, a suspension as opposed to a termination was appropriate.”

FMA spokesman Andrew Park said the investigation into Milford did not have long to run.