ASB has lined up at least four bidders for the Aegis investment platform, according to industry sources, with Australian firms dominating the buyer list.
However, it is understood one NZ-based offer – from a new platform player – was also on the table as the Commonwealth Bank of Australia-owned ASB seeks to offload the pioneering investment administration business.
Offers would likely fall between $50 million to $70 million, a person familiar with the Aegis deal said.
While other Australian-owned banks are unlikely contenders for the Aegis business, a number of independent platform operators across the Tasman – such as Hub24 or Netwealth – could be in the mix. Although, one recently-launched Australian platform business, Spitfire, is understood to have withdrawn a bid for Aegis.
Launched in 1996 under the ASB-owned Sovereign subsidiary, Aegis has about $15.2 billion in funds under administration (FUA), the bank said when announcing a “strategic review” of the platform in May.
However, in the last year Aegis was overtaken for the first time by rival platform provider, FNZ, which now has about $16 billion in FUA sourced from NZ clients.
Aegis requires a massive technological overhaul to bring it up to speed with the new breed of platforms, according to software specialists, or risk a client exodus.
FNZ, for example, is in the throes of transitioning NZ clients – including Jarden and Consilium – to the latest platform technology (dubbed ‘FNZ One’) it offers in the European market.
The NZ platform market is also facing more competition with the NZX-owed Wealth Technologies (a potential Aegis buyer) starting to make waves. Others may follow including the new NZ platform consortium bidding for Aegis, which could launch here soon regardless. Australian wealth management firm, Findex, is also poised to bring its FNZ-backed platform to NZ: the group owns the Crowe Horwath accountancy chain in NZ.
Any new owner would undoubtedly quickly transfer Aegis clients to an existing modern platform system rather than rebuilding the ASB technology from scratch.
Understandably, current anxious Aegis clients – who include Westpac, Hobson Wealth and Westpac – are keeping a close eye on the sales process. It is understood some large clients already had the ASB-owned platform under review but would probably await the sales outcome before making a decision.
ASB head of private banking, wealth and insurance, Adam Boyd, said in a statement this May: “The strategic review is about enabling the ongoing success of Aegis by ensuring its customers continue to receive excellent levels of service in the future. The review will assess if this is most likely to be achieved under ASB or another owner.”
In the May release, ASB said the Aegis review could take up to six months.
Jarden investment bank is running the Aegis sales process.