Link Group has budgeted A$700,000 to absorb the Aon NZ fund administration business, according to the Australian-based firm’s listing prospectus.
The Link prospectus identifies the Aon NZ move as its first foray into fund administration outside its home base of Australia, predicting the “business combination” would have “minimal forecast earnings impact in FY2016”.
“… the costs to complete the Business Combination are expected to be $0.7 million,” the Link listing document says.
Link confirmed this August it would take over the Aon NZ fund admin business.
Stan Malcolm, Link NZ head of operations, said the transfer of Aon clients to the new admin platform should be complete by next October.
“We’re in the process of planning and migration now,” Malcolm said. “It’s a lengthy operation, there are lots of moving parts.”
Prior to the Link deal, Aon said it administered “60 schemes including 22 KiwiSaver Schemes, 9 Complying Superannuation Funds and 14 Defined Benefit Schemes”.
However, the advent of the Financial Markets Conduct Act (FMC) and convergence in the KiwiSaver market has already seen off some of the Aon-administered schemes such as Ravensdown and Smartkiwi.
Malcolm said a number of other schemes in the Aon stable are weighing up their options as the December 2016 FMC deadline draws near.
“Some of them may not migrate [to Link],” he said.
According to its ASX offer document, the Link fund admin services include “data management, member communication, contribution processing, benefit payments, contact centre operation, client accounting, insurance premium collection and claim administration, and statement processing”.
Link also provides funds with data analytics, clearing house, financial planning, direct investment and trustee services, the prospectus says.
The group is the largest third-party fund administrator in Australia, claiming about 30 per cent of the market. Link provides share registry to 46 per cent of the NZX50 companies and 38 per cent of ASX200 firms, the offer document says, as well as shareholder management services to 54 per cent and 76 per cent of the respective listed companies.
Link shares jumped 11 per cent on debut last week in the biggest ASX float of the year, valuing the company at about A$2.5 billion.
John McMurtrie, Link chief, told the Sydney Morning Herald the firm intended to grow its share registry and super fund administration divisions offshore.
“There’s nothing on the table beyond prospects at the moment, but future acquisitions are more likely to be international,” he said.