FNZ ended 2021 with more than $25 billion of assets under administration (AUA) in NZ, a new direct-to-consumer platform priced at $40 million and flat profits just above par.
Post balance date the company also restructured its NZ operations, separating out the local business from previous regional related parties.
According to the just-filed FNZ annual report for the NZ business, the company booked a net profit after tax of about $250,000 on revenue of close to $40 million last year compared to respective 2020 results of $200,000 and $37 million.
Core AUA was up almost $4 billion last year, or 19 per cent, but rising operating costs – up more than $8 million year-on-year to just under $47 million – and platform fee cuts dampened profit growth.
“The Group has continued to make significant investment during the year on enhancing FNZ’s technology offering to customers,” the report says. “Due to this investment and a decrease in interest revenue margins, Net Profit After Tax has only increased slightly even though AuA showed significant growth.”
As reported previously, the historically industry-focused FNZ also bought the direct-to-consumer US share-trading platform, Hatch Invest, from Kiwi Wealth last year for $40 million – a price confirmed in the 2021 accounts.
“[Hatch] paves the way for FNZ to enter the direct to consumer market and extend this offering to current and future clients,” the FNZ report says. “2021 also brought opportunities to partner with existing and new customers in New Zealand to deliver solutions in the KiwiSaver, Margin Lending and market-utility service areas.”
FNZ claimed Consilium as its first KiwiSaver client for as scheme launched late in 2020.
Hatch came with about 50,000 clients, the report says, and almost $30 million of the sale price sheeted home to goodwill: ‘customer relationships’ and ‘brand’ are valued at about $7.2 million and $3.8 million, respectively, in the FNZ accounts.
The Hatch deal was funded by a loan from the FNZ Group Entities – a UK-domiciled holding company for the business that is ultimately owned by a Cayman Islands-based entity.
And under a corporate restructure made operational this February, the FNZ NZ business now sits under a new entity – FNZ Services rather than the previous FNZ Holdings (NZ) company that included other Asia-Pacific divisional reporting.
“This change in structure will enable the New Zealand business to be self-sufficient and meets its strategic objectives independent of the rest of the APAC entities and will also give the Group more autonomy over its resources,” the report says.
However, shared services across the regional businesses will be charged to the new FNZ NZ entity.
Following the corporate shake-up initiated at the end of last year, FNZ founder, Adrian Durham, resigned from the NZ company board.
Now residing in the German city of Munich as at the end of last year, according to the Companies Office, Durham has led FNZ since establishment in 2003 inside broking firm First NZ Capital to a now global platform valued at more than US$20 billion.
The latest FNZ valuation follow a US$1.4 billion capital-raise this February amid a burst of acquisitions for the now London-headquartered business.