The joint venture between SBS subsidiary, Funds Administration New Zealand (FANZ), and Staples Rodway Asset Management (SRAM) will create a collective investment pool of $800 million, according to FANZ chief, Graham Duston.
Under the deal announced last week, FANZ will take a 50 per cent share in SRAM, the investment management arm of accounting firm Staples Rodway, as at March 31 this year.
Duston said the arrangement would boost assets under management of the joint groups to about $800 million, which includes two KiwiSaver schemes and a range of unit trusts.
He said the combined assets could rapidly reach $1 billion.
“The key thing is we’ll be able to use the scale to bring lower fees and costs to investors,” Duston said.
As at March 31, the $130 million SBS KiwiSaver scheme (Lifestages) will assume investment management duties for the $53 million Staples Rodway scheme. While the Lifestages scheme invests via a range of underlying managers, ANZ and Nikko (formerly Tyndall) have to date managed the Staples Rodway KiwiSaver money.
FANZ also has about $150 million in non-KiwiSaver unit trusts while the three recently-launched SRAM unit trusts – conservative, balanced and an international product managed by global hedge fund firm Gottex – add up to a further $45 million.
Both groups also manage discrete client portfolios via respective Authorised Financial Adviser (AFA) networks – about 10 in the case of FANZ and four or five under the SR banner.
Duston said the JV partners would conduct a product review over the coming months.
However, he said the deal was “not just about product” with back-office and compliance synergies – including Discretionary Investment Management Service (DIMS) and Financial Markets Conduct Act (FMC) licensing – also factors.
“And culturally we’re also lined up,” Duston said. “Staples Rodway is a professional advisory provider focused on long-term relationships. Our members are also shareholders, so that also encourages long-term relationships.
“We’ve got a saying down South that ‘you can shear a sheep many times but you can only fleece them once’.”