The government-owned Kiwi Wealth saw an almost 50 per cent year-on-year jump in net profit over the 12 months to June 30, according to figures filed by its parent group last week.
Kiwi Group Holdings – the entity housing Kiwibank, Kiwi Wealth and other related companies – reported net profit of $12.7 million for its wealth management arm over the latest annual period compared to $9.2 million the previous year.
“Kiwi Wealth delivered all its financial targets in FY21, demonstrating an ability to invest and grow as well as continued resiliency,” the report says.
Despite an almost $9 million increase in expenses over the year to reach $51.8 million, total Kiwi Wealth annual revenue of $69.6 million was up about $13 million as soaring funds under management (FUM) boosted fee income.
(The Kiwi Group Holdings figures vary from the separate Kiwi Wealth annual accounts published in September that show total revenue of $52 million and net profit of $11.9 million for the 12 months to June 30 this year.)
As at June 30, Kiwi Wealth reported FUM of $8.8 billion (up from $7 billion in 2020), split between $6.1 billion in its KiwiSaver scheme and $2.7 billion in other (including wholesale, private portfolio and the relatively new retail funds arm).
“Following the successful launch of Managed Funds Service in FY20, FUM has grown almost fivefold to just under $250m as Kiwi have looked beyond more traditional investment tools such as term deposits to provide investment returns,” the report notes.
Meanwhile, the latest annual report says Kiwi Wealth has “invested significantly in core systems to support sustainable growth whilst also mobilizing a programme to begin the transformation of its registry and pricing processes in the KiwiSaver space”.
Kiwi Wealth appointed MMC in September to transition its back-office systems ahead of the new default KiwiSaver regime change at the end of November.
During the 12-month period and beyond, though, Kiwi Wealth has seen a substantial leadership shake-up including the exit of chief executive, chief investment officer, acting chief investment officer, head of wholesale investment as well as other senior departures.
The Wellington-headquartered business is currently headed by, Rhiannon McKinnon, who has served in an acting capacity since earlier this year.
At the same time, the Kiwi Wealth board, chaired by Gregg Behrens, has also been refreshed with Linda Robertson and David Smith both appointed this year. Behrens, previously Asia Pacific chief of Northern Trust Bank, took up the chair job in February last year.
Neither the Kiwi Group Holdings report nor the separate Kiwi Wealth accounts mention the US stock-trading unit, Hatch, which was sold to the investment platform business, FNZ, earlier in October.
It is understood the Hatch deal, due to settle at the end of November, could have netted Kiwi Wealth about $40 million or more.
In an unrelated move, Hatch Invest was registered as a new company on October 22 with Hans-juergen Arz, head data consultancy firm Micado, as sole shareholder.