ANZ Investments is to close down its roughly $3 billion wholesale funds business by the end of August amid client attrition and a flagged shake-up of the group’s retail and KiwiSaver proposition.
In a note this morning, ANZ told clients it had made the “difficult decision to exit our Wholesale business”.
According to the note, the wholesale shutdown “is necessary for us to ensure we remain competitive and provide our full range of customers with the best possible investment propositions”.
“Our Wholesale business has faced subdued growth in recent years and now represents approximately 10% of our overall business,” ANZ told clients. “We believe we would need to make significant investments into our systems to continue to improve our service and position this business for sustainable growth.”
Last year the $33 billion plus ANZ funds business, headed by Fiona Mackenzie, revealed a potential tie-up with both Mercer and BlackRock to reshape its investment offering – albeit nothing yet has come of the mooted arrangements.
Mackenzie said in a statement that “we don’t see future growth for ANZ Investments in this [wholesale] space.”
“We believe these investors will be best served by a fund manager that is dedicated to supporting,” she said. “Wholesale customers and we’ll work closely with each of our Wholesale clients to ensure the transition is as smooth as possible.”
ANZ has been a stalwart player in the local wholesale and institutional investment business for decades with its head of distribution, Graeme Thomlinson, a well-known figure in the industry.
The manager, which is the biggest KiwiSaver provider with over $20 billion across its three schemes, will give formal notice to wholesale clients in a month with a target final shutdown by August 31.
“We’ll aim to facilitate the withdrawal of your investment to make it as seamless as possible,” ANZ says in a guide. “In certain circumstances we can transfer securities directly to another provider (rather than execute a cash withdrawal).”
The bank-owned funds manager will now centre on its three KiwiSaver schemes as well as other retail and private wealth clients.
“As KiwiSaver has continued to grow and become a far more significant part of our business, we have decided now is the time to focus our efforts on those investors,” Mackenzie said.
“ANZ Investments is the country’s biggest KiwiSaver provider with managed funds and ANZ Private investments now making up close to 90 per cent of our business.”