In a quick hand-off last week, Fisher Funds sold its recently acquired Aon employer super master trust to pension management specialist, Lifetime Retirement Income.
Lifetime will see funds under management almost double to $450 million after absorbing the Aon scheme, which reported assets of about $208 million (held on behalf of 2,229 members) as at the end of March this year.
The deal also offers a slight reprieve to Aon underlying managers Russell Investments, Milford, Nikko and ANZ with the four investment providers to stay on under Lifetime ownership. However, Lifetime may simplify some of the existing scheme fund options over time, according to the new master trust product disclosure statement (PDS).
“There are currently 16 funds available in the Scheme – you may choose to invest in up to four funds. Contributions to the Scheme are invested evenly across the funds you select. In the future the number of funds available is likely to reduce,” the Lifetime PDS says. “There is no date currently planned for when this is likely to happen.”
Lifetime officially assumed control of the Aon master trust holding entity, Superannuation Management Nominees, on July 1.
After taking ownership of the Aon assets last December, Fisher had signaled an intention to shift the master trust investments to its in-house funds as per pending arrangements for the larger KiwiSaver scheme. The almost $15 billion Takapuna-based manager gave notice to Aon KiwiSaver members of plans to bulk-switch investments to Fisher options in a process due to take place this month:
Fisher reported about $630 million under management at the end of March in its own super master trust where the Aon employer scheme was originally expected to land.
Lifetime initially offered to buy the master trust when Aon first went to market last year but the sale was positioned as a combo deal with the KiwiSaver scheme.
Ralph Stewart, Lifetime founder, said the Aon scheme fit well with its strategy of offering managed income products built around retiree needs.
Many of the Aon clients are close to retirement, Stewart said.
Last year Lifetime remodeled its business strategy after near zero interest rates and an almost doubling of central bank-set capital reserves scuppered the group’s guaranteed income approach.
Most Lifetime clients stayed on after the transition to a new fund structure featuring a flexibly managed drawdown of investments providing regular income. Currently, Lifetime uses Vanguard and Harbour as underlying fund managers.
The company is also on track to launch a new reverse mortgage “income solution” later this year.
Fisher is one of the remaining bidders in the race to buy the approximately $9 billion Kiwi Wealth investment business with a decision likely before the end of July – or thereabouts.