Up to five private equity firms are vying for a two-thirds stake in Wellington-originated investment platform business, FNZ, UK trade press reported last week.
The New Model Adviser website says FNZ senior management would allegedly prefer multiple buyers for the majority shareholding – currently split between private equity managers, General Atlantic and HIG Europe – to avoid a single player dominating the business.
According to the report, FNZ management had already staged “informal discussions with a number of potential investors” in a deal tipped to value the firm at about £2 billion (or NZ$4 billion).
Given the size of the deal – first floated in July – a joint-venture buyout of FNZ would be the most likely outcome, the article says.
An FNZ spokesperson told the UK publication that management had already ruled out an IPO for a business whose “long-term growth strategy is best realised via private ownership”.
“The company decided some time ago to run a private equity-only process, both to provide an exit for its two current private equity investors; and reflecting the company’s substantial global growth opportunities,” the FNZ spokesman said.
Emerging out of stock broking firm First NZ Capital in 2004, FNZ now has almost $500 billion in assets under administration, including about $50 billion sourced from its recent purchase of German investment platform ebase from Commerzbank.
The UK report says the ebase deal has held up the FNZ sales process, now expected to be signed off by the end of March next year.
Since landing cornerstone UK client, Standard Life, in 2005, FNZ has considerably expanded its client list – especially in Europe – to include big name financial institutions such as Zurich, Aviva, Barclays, HSBC and Santander.
Back on its home turf, FNZ has about $15 billion under management for a range of NZ institutions and financial advisory groups, including close to $2 billion with adviser services firm, Consilium.
Last December the Edinburgh-headquartered firm also branched out from its core administration business to take a stake in start-up UK robo-advice provider, Advicefront. In June this year, FNZ tipped in a further £1 million to Advicefront, doubling its investment in the business.
At the time, FNZ founder, Adrian Durham, said: “We’re really excited about the potential for Advicefront’s technology to help ambitious financial services firms serve more clients, in a cost-effective way, while retaining the all-important human touch that customers want.”