TA Associates could fetch up to $300 million or more for its reportedly in-play one-third stake in Fisher Funds.
The Australian Financial Review reported last week that US private equity firm is sounding out investment banks across the Tasman to broker the sale, , with Goldman Sachs tipped as favourite.
“Sources said Goldman Sachs, in particular, would be well-placed to win the mandate, not least because of the long-time working relationship between Ed Sippel, TA Associate’s Asia boss, and Craig Murray, Goldies’ top gun for the Asia Pacific financial institutions advisory group,” the AFR story says.
News of the mooted TA exit follows the resignation of incumbent Fisher chief, Bruce McLachlan, who steps down in February next year with Simon Power named as successor.
McLachlan joined Fisher in 2017 just as TA joined the share register along with the TSB Community Trust (now the Toi Foundation). Initially, TA took a 25 per cent stake in Fisher, later rising to about 34 per cent.
Toi, meanwhile, increased its Fisher holding to roughly 66 per cent at the time after first buying a quarter share of the fund manager in 2013 for $33 million.
Fisher reported about $7 billion in funds under management in 2017, suggesting a rule-of-thumb valuation of $200 million plus – although industry sources suggest the final price may have been well in excess of that.
The manager paid $310 million to buy Kiwi Wealth last year, which added more than $7 billion to the Fisher asset pool that now stands close to $23 billion.
Based on the standard fund manager valuation yardstick of 3 per cent of assets under management, Fisher would be worth about $700 million – although using the same metrics as per the Kiwi Wealth deal, the figure would be closer to $1 billion.
Last December, Fisher changed its ownership structure with two new holding companies, FFML TopCo and FFML HoldCo, put in place.
“The establishment of the new holding companies were as a result of Fisher Funds Management Limited acquiring an ownership of 100% in Kiwi Wealth Management Limited as at 1 December 2022,” the Toi Foundation 2023 annual report notes.
More recently, Fisher has reserved four company names – variations of Fisher Funds Wealth – suggesting an operational reshuffle is in the offing as the Kiwi Wealth conversion completes.
TA also has significant stakes in Russell Investments, Betashares and investment administration conglomerate, Apex Global, which bought both MMC and Implemented Investment Solutions in NZ within the last couple of years.