The NZX has seen funds under management soar above $8 billion after completing its buyout of the ASB employer superannuation master trust last week.
Under an arrangement bankrolled by “cash on hand and new debt facilities”, Smartshares assumes control of $1.8 billion held in the ASB vehicle, lifting the NZX-owned SuperLife scheme to a close second in the employer super market behind AMP.
Post the ASB purchase the SuperLife employer scheme rises to about $3.2 billion compared to the $3.6 billion reported by the AMP NZ Retirement Trust (NZRT) as at the end of last September.
Subsequent market volatility and a few mandate changes may have altered the competitive balance slightly since during a period that also included the exit of the $200 million Aon employer scheme from the approximately $8.5 billion scene. Fisher Funds bought the Aon KiwiSaver and employer super schemes effective December 1 last year.
The employer super master trust market has whittled down to just four with the exits of ASB and Aon, however, the Wellington-based Booster signaled a move into the sector earlier this year.
In a release, the NZX says the ASB master trust includes 17,500 members across 100 employers. But the ASB master trust is highly skewed to the now-shut State Services Retirement Savings Scheme (SSRS), which represents about two-thirds scheme assets and 80 per cent of members.
The statement says the NZX will reveal the “financial impact” of the ASB deal in an earnings update due next week after paying $25 million upfront for the master trust.
As at the end of January, the NZX funds business – headed by Hugh Stevens – reported more than $6.2 billion under management including a $370 million government-assisted top-up of the SuperLife KiwiSaver scheme, which debuted as a default provider last December.
With the ASB assets, the NZX funds jump to $8 billion, although the manager will have to transition its newly acquired members to different structures. Both ASB and Smartshares (including SuperLife) favour passive management with some active options on the side.
“The acquisition (through NZX’s wholly owned subsidiary, Smartshares Limited) represents a step-change in scale for NZX’s passive funds management business and is aligned with NZX Group’s strategy to capture complementary opportunities across its Funds Management, Wealth Technologies and Markets businesses,” the release says.
Despite the asset size enhancement, the NZX funds took a hit in January along with most others amid brutal market volatility.
Total NZX assets under management fell from over $6.5 billion at the end of December to $6.3 billion a month later. Over the same period, the NZX companion investment platform business, Wealth Technologies, saw funds under administration drop from $11 billion plus to just under $10.6 billion.