Fisher Funds founder, Carmel Fisher, has cut formal ties with the firm she started 20 years ago after resigning as director last week.
Fisher, who stayed on as director after selling down her stake in NZ’s sixth-largest funds management business in 2017, has been replaced on the board by Guy Roper and Jennifer Moxon. Roper is CEO of Port Taranaki and trustee of the TSB Community Trust (Fisher’s majority shareholder); Moxon, a professional director, previously served as IBM NZ chief.
In a statement, the company says: “Carmel’s legacy will live on at Fisher Funds long into the future.”
While it marks an end of an era for the Auckland-based investment firm, Fisher will remain as director on the three listed investment companies – Kingfisher, Marlin and Barramundi – for the time being.
Fisher’s departure from the board comes as the firm she founded in 1998 as a small boutique reported a record profit.
The groups saw its net profit after tax soar by almost 40 per cent over the 12 months to March 31 to hit more than $38 million.
During the annual period Fisher funds under management (FUM) jumped from $7.6 billion to $8.4 billion, generating annual revenue of close to $90 million compared to $69 million in the previous year.
Underlying fund investors also experienced a good year, the Fisher report says: “All funds provided positive returns (after fees) during the year with the highest being the Fisher Funds International Growth Fund returning 21.5% for the 12 months to 31 March 2018.”
The Fisher result follows similar bumper years for performance fee-based managers Milford Asset Management and Pie Funds, which reported respective gross revenues of $61.1 million $16.7 million on FUM of $5 billion plus and about $800 million.
However, while Pie’s revenue was split almost evenly between performance and annual management fees, the latter dominated for both Fisher and Milford, with performance-based remuneration accounting for about 17 per cent ($14.7 million) and 30 per cent ($17.3 million) of income, respectively.
Fisher and Milford paid out respective dividends of $36.85 million and $10 million for the 2017/18 financial year – amounting to a per share bonanza of $100,000 in the case of Milford.
According to the Fisher accounts, the group accrued operating expenses of just over $29 million (and $36 million in total costs) during the latest fiscal period – up about $6 million year-on-year.
Employee remuneration accounted for just over half ($16.8 million) of Fisher operating expenses followed by ‘other’ ($6.4 million) and commission payments ($3.5 million).
Over the year the firm also reduced debt to just under $19 million from almost $21.5 million the previous year. Fisher borrowed over $30 million to help fund its $79 million purchase of Tower Investments in 2013.
The group has about $6 million of ‘deferred acquisition costs’ – commission and ‘introductory fees’ – recorded on its books as an asset.
“Deferred acquisition costs are incremental costs such as commission and introductory fees, that directly relate to acquiring new KiwiSaver scheme members, superannuation scheme members and managed investment scheme investors,” the Fisher report says.
Fisher has distribution agreements with TSB Bank, The Co-operative Bank and Co-op Money NZ (and associated credit unions).
Over the 12 months to March 31, Fisher paid TSB Bank (a related party) $203,000 for introductory fees and $273,000 in commission compared to $219,000 and $131,000, respectively, the previous year: the payments principally cover distribution of the Fisher KiwiSaver via the TSB Bank network.
TSB Community Trust is the majority shareholder of both TSB Bank and Fisher Funds (through subsidiary, TSB Group Investments).
Last year TSB Community Trust increased its stake in Fisher Funds to about 75 per cent (from a previous 22.6 per cent) in a joint venture deal that saw US private equity firm, TA Associates, acquire the remaining equity from founder Carmel Fisher and other shareholders.
The two Fisher KiwiSaver schemes collectively manage about $4 billion – or just under half of the firm’s total FUM.