FNZ has emerged as the winning bidder for the Kiwi Wealth-owned US share-trading platform, Hatch.
As reported earlier, FNZ was expected to pick up Hatch after Kiwi Wealth confirmed “offers of interest” for the business this August.
In a statement this morning, FNZ said the Hatch purchase provided “a strategic opportunity to gain exposure to the direct-to-consumer segment in New Zealand”.
To date, FNZ has operated mainly as business-to-business wealth management platform servicing advisers and financial institutions.
The deal “also supports FNZ’s long-term plan of broadening its wealth management proposition in its native New Zealand market”, the release says.
Kristen Lunman, Hatch general manager, said in the statement that FNZ offered the scope to boost the three-year-old platform business “to the next level”.
“Under the new ownership of FNZ, we have the necessary backing to scale at the pace a high-growth start-up requires,” she said.
Lunman co-founded Hatch with Natalie Ferguson, Jarred Sewell and Jakub Chodounsky in 2018 after building the framework inside the Kiwibank ‘fintech accelerator’. However, Kiwi Wealth retained full ownership of Hatch once established.
Since launch Hatch has traded over $2 billion of US stocks on behalf of about 130,000 NZ clients.
In a note to members this morning, Hatch says: “We’ve got big dreams, and FNZ will supercharge our ability to deliver them. When we head to our new home, it’ll be the same team, some community, same dad-jokes (#DiamondHands #Ka-ching!), but there will be one big change. A huge one. And that’s our ability to deliver the things you need to put your money to work. Faster.
“Welcome to Hatch 2.0. Now with a new rocket ship to take us all to the #moon.”
Hatch uses the US-based DriveWealth as the ultimate broker. Rival platforms Sharesies and the Australian-headquartered Stake also feed into DriveWealth for their respective US stock-trading services.
James McDonnell, FNZ NZ chief, said Hatch had “reached a logical point in its lifecycle to pursue ownership transition, and FNZ now has the capability and appetite to build on these foundations in order to achieve a step-change in their growth trajectory”.
“We also believe this move is entirely consistent with the needs of FNZ’s existing customer base, as having exposure, insight and experience in this segment of the market allows FNZ to provide a more relevant proposition to its customers whilst also creating an attractive entry point for a more sophisticated offering,” McDonnell said.
FNZ is one of the country’s most successful fintechs, growing from a small base inside the-then First NZ Capital (now Jarden) business in 2004 to a global investment platform powerhouse, headquartered in Edinburgh.
Following an ownership shake-up in 2018, FNZ was valued at about $3.5 billion. The NZ business provides custodial wrap and wealth administration services to several large institutions and adviser groups, notable the Consilium platform.
In the statement this morning, Kiwi Wealth acting chief executive officer, Rhiannon McKinnon, said: “The sale of Hatch will enable Kiwi Wealth to further invest and innovate in the advice space to help Kiwi make better financial decisions in the long term.”
Hatch will operate as an “autonomous business” within FNZ, the release says, with the same team.