A Canadian pension fund and an investment firm founded by former US vice-president, Al Gore, have stumped up almost $2.3 billion to secure a two-thirds stake in Wellington-originated platform business, FNZ.
According to a Bloomberg report published overnight, Gore’s Generation Investment Management and Canadian pension fund Caisse de Depot et Placement du Quebec teamed up to buy the two-thirds of FNZ previously owned by private equity firms HIG Capital and General Atlantic in a deal that values the firm at £1.7 billion (or NZ$3.45 billion).
It was the first deal under a new partnership agreement between Caisse de Depot and Generation to invest about US$3 billion in long-term private equity buyouts.
FNZ founder, Adrian Durham, and about 400 of the firm’s staff would retain a third of the company’s shares, the Bloomberg report says.
“The deal will help us grow share in the wealth-management platform market to trillions versus hundreds of billions,” said Durham, who has grown the company to about 1,400 employees. “You have to be a scale player.”
Emerging out of stock broking firm First NZ Capital in 2004, FNZ now has almost $500 billion in assets under administration, including about $50 billion sourced from its recent purchase of German investment platform ebase from Commerzbank.
FNZ landed its big break in 2005 in an agreement to provide the platform technology to UK financial services giant, Standard Life. HIG bought a stake in the business in 2009 while General Atlantic entered the FNZ share register in 2012.
“HIG, which initially injected less than 10 million pounds in FNZ’s equity, is now selling its stake for about 450 million pounds, according to a person familiar with the matter, who asked not to be identified because the transaction was private,” Bloomberg reports.
JP Morgan and Chase advised the sellers on the deal.