NZX Wealth Technologies, the NZ bourse-owned investment platform (formerly known as Apteryx), has closed in on $2 billion of funds under administration after signing on Craigs Investment Partners last week with another looming deal expected to almost double that figure.
The agreement inked with Craigs will see the country’s largest stockbroking house outsource administration for its KiwiSaver, superannuation (approved to receive UK pensions) and myStart products, which add up to about $600 million. To date, Craigs provided in-house admin for the products, which invest mostly into underlying funds including the broker’s own QuayStreet Funds.
Stephen Jonas, Craigs head of client services, said the firm had been looking for an outsourced solution for some time with NZX Wealth Technologies proving a good fit.
“The funds have been on our own platform for a long time and it’s been on our IT roadmap for a while to change,” Jonas said. “We’re not IT specialists.”
In a statement, NZX chief, Tim Bennett, said the deal was “a validation of the quality of the NZX Wealth Technologies platform and our team who have extensive experience developing and operating these systems”.
According to industry sources, the NZX-owned platform (formerly known as Apteryx) is also close to signing up Macquarie NZ, whose approximately $1.7 billion of client funds is currently administered by Aegis, representing a significant chunk of the the ASB-owned platform’s approximately $10 billion of funds under admin (FUA).
If the deal goes ahead, the win would mark a major coup for NZX Wealth Technologies, which reported FUA of more than $1.3 billion as at the end of May – most of which was inherited as part of the NZX $1.5 million Apteryx purchase last August.
The addition of the Macquarie business would push NZX Wealth Technologies FUA close to $4 billion and potentially trigger a bonus payment to the former owners of Apteryx (composed of parties associated with Auckland-based global hedge fund-of-funds business NZAM).
The 2015 NZX annual report notes: “Up to $2.5 million in cash will become payable at 30 September 2016 if [NZX Wealth Technologies] has Funds Under Administration of $3.0 billion and monthly revenue of $0.25 million, with this amount reducing over a six month period to nil if these two targets are not met by 31 March 2017,” the NZX report says.
At the time, the NZX had set aside half of the Apteryx bonus money based on “the expected probabilities of achieving the earnout”.
Neither Macquarie nor the NZX would confirm a deal was imminent.
Macquarie NZ is currently undergoing an ownership change following a management buyout engineered by former Fisher Funds co-head and current Generate director, Warren Couillault.
“We’re excited about the potential of the NZX Wealth Technologies offering and we continue to discuss with a range of potential clients their future requirements for wealth platforms,” Bennett said in the NZX statement.