The NZX-owned investment platform, Wealth Technologies, will see funds under administration soar to more than $12.5 billion following a deal inked with Fisher Funds last week.
Fisher will shift the Kiwi Wealth discretionary investment management service (DIMS) money to Wealth Technologies from an in-house system.
The Kiwi Wealth Private Portfolio Service – a DIMS product originally launched in the manager’s days as Gareth Morgan Investments – is understood to hold about $1.6 billion.
As at the end of November, Wealth Technologies reported more than $11.1 billion under administration, an increase of over 11 per cent year-on-year.
In a statement, outgoing Fisher chief, Bruce McLachlan, said moving the Kiwi Wealth DIMS to the NZX platform would “allow us to offer blended investment strategies with a simplified structure and truly tailored investment strategies, taking individual preferences for risk, time horizon, goals, and other factors into account”.
“Transforming from a rigid legacy platform will also deliver operational efficiencies which will improve our clients’ experience which coupled together with an enhanced digital experience, will deliver more value to our clients,” McLachlan said.
The Takapuna-based manager is currently amalgamating the various components of the former government-owned Kiwi Wealth business it acquired last year for $310 million in a complex back-office rearrangement.
Fisher will drop the Kiwi Wealth brand next year but rationalisation of the product and administration services could drag on well beyond 2024.
While the $6.6 billion Kiwi Wealth KiwiSaver scheme was the main prize, the DIMS assets represent a sizable bonus.
Lisa Turnbull, Wealth Technologies chief, said Fisher set a “time critical schedule” to complete the platform transition.
“… Fisher Funds will benefit from our deep market expertise and end-to-end service provision including onboarding a new service to our platform, data migration, and development projects with dedicated relationship management and support,” Turnbull said in the release.
She said “newly developed functionality” built to Fisher specifications would also have flow-on benefits for other NZX platform clients.
Wealth Technologies has racked up several platform wins this year including a novel deal with the $200 million Cook Islands National Superannuation Fund and Whangarei advisory firm, Yovich & Co. In August the NZX also abandoned efforts to find a ‘strategic partner’ for the administration business, citing strong growth prospects.
Meanwhile, Fisher part-owner, US private equity firm TA Associates, is reportedly looking to sell its one-third stake in the now $23 billion fund manager.
McLachlan is also due to end an almost seven-year reign atop Fisher next February with former National Party MP and Westpac NZ executive, Simon Power, lined up as successor.