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Investment Management

Page updated 18 Jul 2016

The Treasury is the lead on investment management (and asset management) in the State sector.

Cabinet Circular CO(15)5, Investment Management and Asset Performance in the State Services, takes effect from 1 July 2015. For further information on the new Investor Confidence Ratings for investment intensive agencies, please visit our Investor Confidence Rating pages. To read more about Long Term Investment Plans, please see our Long Term Investment Plans page.

The Treasury has accountability for developing and maintaining the rules and processes around investment management, including those relating to major projects and programmes (individually and collectively). Most of the rules are contained in the Cabinet Circular CO (15)5. This new circular takes effect from 1 July 2015 (see Related Resources below).

Within the Treasury, our work in this area is led by the Investment Management and Asset Performance team. Working alongside other State sector agencies, our ambition is to get the government investment management system working well. We wish to effectively turn intent into outcomes.

The investment management system means the processes, rules, capabilities, information and behaviours that work together to shape the way investments are managed throughout their life cycles.

The system is complex, with interrelated cycles spanning months or years. The system has to effectively convert business unit, agency, sector and all-of-government needs into outcomes in a way that gets the best value for New Zealand (given financial and other constraints).

The investment life cycle is made up of four phases: think, plan, do and review. Together these create an ongoing dynamic as ideas are tested, refined and adopted or discarded within an agency and across government. Each phase has different implications for agencies and decision makers.

Think

Think - investment possibilities: To anticipate as much as possible what will be required to transition to the outcome, and satisfy the intent while maintaining services.

Plan

Plan - investment choices: To analyse and decide which investments to undertake considering the optimal overall value from the limited resources, and the current risk appetite.

Do

Do - investment development: To give chosen investments the greatest possibility of realising the benefits promised, while maintaining controls to avoid loss of value.

Review

Review - investment performance: To review the performance of investments against expectations. To encourage promised benefits to be realised and assets to be operated near optimal levels of performance. To use any lessons learned from the performance of investments to inform and improve the development of future investment activity.

A process diagram illustrating the Think - Plan - Do - Review approach.

Related resources

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