The NZX capped a busy week last Friday with another foray into the funds management and financial advisory space, announcing a deal to buy the recently-rebranded investment administration platform, Apteryx.
In a release revealing it had sold down its half-share in Australasian registry business Link Market Services for $13.8 million, the NZX said it had entered into a heads of agreement to buy Apteryx for an undisclosed sum.
The Link sale also paved the way for an NZX tilt at the Reserve Bank of New Zealand-owned clearing house, NZ Clear.
While the NZ Clear attempt has been well-signaled by the NZX, its move on Apteryx took the market by surprise.
Formerly known as Amadeus Asset Administration, Apteryx, was spun out of parent group New Zealand Assets Management (NZAM) last year with a view to take on incumbent investment admin platforms, FNZ and the ASB-owned Aegis.
Most, if not all, of the $1 billion under admin reported on Apteryx has been funneled through former owner NZAM. The Apteryx share register remains dominated by NZAM directors.
Apteryx chief and 10 per cent shareholder, Paul Baldwin, who was instrumental in building the Aegis system, has been driving an upgrade in the underlying technology to compete with Aegis and FNZ on price and functionality.
As well as targeting financial advisers, Apteryx provides “custom builds for larger organisations and a turn- key solution for boutique organisations”, according to its website.
It is understood, Apteryx is also working on a direct fund sales platform.
Apteryx launched a new ‘investor direct trading portals’ service this quarter, its website says.
Last December the NZX bought KiwiSaver and superannuation provider Superlife in a deal that, pending work-out provisions, could eventually cost the stock exchange up to $35 million.
Neither Apteryx nor the NZX were available for comment prior to press-time. The NZX share price was unmoved by the Link/Apteryx announcement, flatlining at $1.07 on Friday.
Meanwhile, the local funds management industry is baulking at steep price increases for the new S&P/NZX index data. According to sources, managers could see annual index data fees rise from about $1,500 to $17,000.
Managers use the index data for benchmarking, performance attribution and client-reporting purposes.
Richard Stubbs, director of start-up boutique firm Castle Point, said if the NZX index data prices became too much of a burden local fund managers may have to “look at other options”.
“The NZX is in a monopoly situation but we don’t want to be taken advantage of,” Stubbs said.
Other managers contacted by Investment News NZ (IN NZ) begrudgingly accepted that the index price hikes were inevitable.
Mel Firmin, managing director Devon Funds Management, said over the last couple of years fund managers have “have seen a sharp increase in costs particularly around compliance”.
“I was surprised at the cost of the [NZX/S&P] feed,” Firmin said. “It is a service we need and therefore have no option but to subscribe.”
On the plus side, other managers acknowledged that the newly-calculated NZX/S&P indices would bring global consistency and a greater degree of transparency.
The NZX has said the index data cost increase was driven by S&P’s global pricing methodology.