The $14 billion Fisher Funds has joined fellow performance-fee-enhanced managers such as Milford Asset Management and NZ Funds in reporting bumper profits for the 12 months to March 31 this year.
However, unlike Milford and NZ Funds, Fisher recorded steady annual growth in base management and performance fees rather than the supercharged results booked by the other two managers.
According to the latest Fisher accounts, the Takapuna-based manager locked-in total fee income of almost $126 million for the 12-month period compared to over $108 million in the previous year. Baseline management charges rose about $14 million year-on-year to hit $99 million topped-up with performance fees of $23.3 million ($17.6 million in 2020).
Administration fees fell from $8.5 million to $6.9 million over the year as Fisher, like many providers, pared back KiwiSaver fixed member charges.
Fisher, headed by Bruce McLachlan, will lose its default KiwiSaver status at the end of November this year. The Fisher Two (originally the Tower KiwiSaver) scheme manages default members in the Cash Enhanced Fund, which held almost $720 million at the end of March this year, accruing fees of about $4.7 million.
“The Cash Enhanced Fund will continue to be managed as a going concern within the Scheme [after the default changeover],” the Fisher Two KiwiSaver 2021 report says.
By contrast, Milford, which has roughly the same funds under management (FUM) as Fisher, reported total revenue of almost $163 million in the latest fiscal period composed of similar annual base charges of $93.4 million (up almost $20 million year-on-year) and performance fees in excess of $68 million or more than triple the 2020 line item of $21.2 million.
Fisher, which is owned by the TSB Community Trust and US private equity firm TA Associates, racked up net profit after tax of almost $50 million against just $11.7 million for Milford. But the reporting entity, Milford Funds, also paid a $136.6 million ‘management services’ fee during the year to parent entity Milford Asset, where other costs and profits are distributed: last year the same transfer charge amounted to $77.6 million.
Meanwhile, the $2.1 billion Auckland-based boutique NZ Funds, which has about one-seventh the FUM of either Fisher or Milford, achieved nominal annual financial returns just shy of its larger rivals. The NZ Funds 2021 accounts show the firm almost quadrupled top-line revenue over the 12-month period to reach close to $84 million ($26.3 million last year) including $57.2 million of performance fees ($2.8 million last year).
As reported in May this year, NZ Funds reported fees of almost 25 per cent (including 17 per cent performance fees) in just one of its funds during the 12-month period after a big bitcoin bet paid off.
The group recorded net profit after tax of almost $36.5 million for the 12 months to March 31 this year, up from $4.1 million in the prior annual period. NZ Funds paid a net dividend of over $22 million in May this year – or $22 plus per share – on top of a further $1 million or so in dividends split in April and June payments.
NZ Funds, headed by Michael Lang, also features a long-term incentive bonus scheme that awards certain executives shares in parent entity, Investment Group Holdings (IGH). Under the plan, the NZ Funds executives would receive shares in the parent if the group sells between October 2023 and the end of September 2026.
Elsewhere, the accounts confirm subsidiary firm, NZ Funds Administration Services, was due to be formally deregistered in July following board approval for the move last December.