NZX Wealth Technologies has made the “first step to a closer collaboration” with sister funds management firm, Smartshares, after taking on new back-office duties for an institutional client.
According to a release, the NZX-owned platform is “extending its technology expertise and wealth custody and operational services to Smartshares” – initially for a single institutional client, understood to be the AIA NZ life insurance legacy funds.
Smartshares won the approximately $500 million AIA mandate last September.
Lisa Turnbull, NZX Wealth Technologies chief, said the deal marks out new territory for the platform as the NZX seeks to take advantage of “operational leverage” between the administration and investment management arms.
Under the arrangement, the NZX platform would take manage the AIA registry while other admin tasks are carried out by Trustees Executors.
Turnbull said NZX Wealth Technologies already offers some non-unitised registry services to the Craigs KiwiSaver and Cook Islands pension schemes.
Anna Scott, Smartshares chief, said in the statement that the institutional client transition to the NZX platform was underway with “significant efficiency gains” expected from the outset.
“By automating and simplifying our processes while also reducing operational risks associated with manual data entry, we’re creating a better operating model for our investment management operations,” Scott said.
NZX Wealth Technologies funds under administration (FUA) increased by about a third during the 12 months to the end of March to close at $13.7 billion.
The platform FUA jumped by $2 billion in March, largely as the former Kiwi Wealth discretionary investment management services assets (now part of Fisher Funds) came aboard.
Following a burst of new sign-ups, NZX Wealth Technologies counted 23 platform clients as at the end of last year with a couple of advisory firms joining in 2024.
“In its 2023 annual report, the NZ stock exchange says “the growth from the existing contracted transition activity and the new business prospect pipeline should ensure NZX Wealth Technologies meets its objective of being cashflow breakeven by the end of 2024 and will deliver on its longer term target of FUA between $35 and $50 billion”.
Turnbull said the group had “four more projects” lined up for completion over the next few months.