The long-running Kiwi Wealth saga may be just days away from completion with the final three bidders understood to have been notified of the outcome last week.
Fisher Funds, Jarden and dark horse, Booster, have all been in the running to pick up the in-play government-owned wealth manager for an estimated $300 million price-tag.
While Fisher – via part-owner, TA Associates – and Jarden would likely fund any purchase with private equity money, the Wellington-based boutique, Booster, had lined up a large iwi investor as a capital partner, according to sources close to the deal.
In addition to its ‘pure Kiwi’ ownership claims, Booster might have an advantage as one of the current crop of KiwiSaver default providers: Fisher was stripped of the status last year.
With about $9 billion in assets under management, including more than $6 billion in its KiwiSaver scheme, Kiwi Wealth, has been on the block since the beginning of this year in a process run by the Australian investment-banking arm of Goldman Sachs.
Fisher and Booster manage about $14.5 billion and $6 billion, respectively, in KiwiSaver and retail funds while Jarden has links to the sector through majority ownership of the $9 billion Harbour Asset Management.
Jarden briefly operated a KiwiSaver scheme in its former days as First NZ Capital, ultimately, selling the tiny fund (of about $9 million and 650 members) to Fisher in 2010.
Reported race favourite, Fisher, would see funds under management jump to more than $23 billion if successful in its Kiwi Wealth bid, rivaling ASB as the second-largest manager in NZ.
Alternatively, Booster would be on even footing with Fisher if it wins over current owner, Kiwi Group Holdings (KGH), rising to become the third-largest KiwiSaver provider.
NZ Post owns slightly more than half of KGH with the NZ Superannuation Fund and the Accident Compensation Corporation holding 25 per cent and 22 per cent, respectively.
Over the last 12 months KGH has sold off the group’s life insurance arm and the Kiwi Wealth-owned Hatch investment platform – fetching $40 million plus apiece. In addition to Kiwi Wealth, KGH owns Kiwibank and mortgage-broking firm, NZ Home Loans.
Behind the scenes, KGH also tidied up its share register in April this year after redeeming 300 million shares formerly owned directly by the Crown (acting via the Finance Minister).
In March this year Paula Rebstock, KGH chair, confirmed the board had hired Goldman Sachs Australia to “test market interest” in Kiwi Wealth.
But given the government ownership links and its recent reappointment as a default KiwiSaver provider, Kiwi Wealth remains a politically sensitive asset. It is understood the mooted Kiwi Wealth sale was triggered by a desire by ACC to exit its KGH shares.
Kiwibank bought the-then $1.5 billion Gareth Morgan Investments business in 2012 for $50 million, later converting the KiwiSaver and private portfolio manager into Kiwi Wealth under the KGH structure.