Investment administration specialist firm, Adminis, is poised to expand its range with a move into the fund-hosting business.
Adminis will enter a market pioneered by fellow Wellington-based company and significant client, FundRock NZ (now part of the Apex group), as a front-of-house host for fund managers.
Matan Gan-El, Adminis chief, said the decision to add fund-hosting services followed “explosive” demand from offshore managers looking to gain access to NZ.
“We initially thought there wasn’t much space in the market for a new fund-hosting business but the demand has grown at a speed we hadn’t anticipated,” Gan-El said. “We only decided to go ahead about a month ago.”
He said the group would likely confirm its first fund-hosting client in a couple of months with a number of others in the pipeline.
FundRock uses Adminis as administrator for several of its fund clients but Gan-El said the two businesses would be more complementary than competitive in the hosting arena.
It is understood Adminis, which does not have a managed investment scheme licence, would host wholesale funds only.
Gan-El said the business would focus on managers entering NZ with a clear niche and growth strategy.
“We will use our technology to help managers set up funds in NZ. All distribution and investment decisions will remain with the managers.”
Historically, most offshore managers entered NZ via Australia-domiciled funds offered under the trans-Tasman mutual recognition regime but increasing local investor preference for portfolio investment entity (PIE) structures has spurred demand for hosting options.
As well as FundRock, which has cooked up PIEs for more than 20 offshore firms, several local managers have also packaged international products in tax-effective wrappers.
While Adminis already provides reporting services, the company would bolster its anti-money laundering, compliance and legal capabilities to gear-up as a fund-host.
The group formed a new company, Adminis Funds, at the end of June to accommodate the hosting business.
Founded in 2013 by early TradeMe investors, Adminis has grown under the radar to accumulate more than $10 billion in funds under administration.
According to Gan-El, the business would hit the $11 billion mark soon on the back of client growth and strong markets.
“We have more than 50 clients representing about 50,000 underlying investors and we price around 140 funds every day,” he said.