The almost $1 billion Pie Funds is seeking up to $75 million for a 75 per cent stake in the business, according to sources familiar with the deal.
Pie, which launched in 2007, tapped KPMG in May to sound out potential investors in the privately-held company.
It is understood, the Pie sales pitch included two options: either a 25 per cent or 75 per cent share in the boutique funds management firm, with an implied total business value of $100 million.
If Pie can attract buyers at the sticker price it would represent about 10 per cent of the firm’s current funds under management (FUM).
As a rule-of-thumb, funds management businesses typically fetch about 3 per cent of FUM at the upper end.
Recently, the NZ funds market has seen a couple of small transactions as a UK-Christchurch consortium, Alvarium Partners, took a slice of both Pathfinder and NZAM.
The last major fund deal in NZ saw TSB Community Trust and TA Associates buy the remaining 51 per cent of Fisher Funds in 2017. At the time, TSB valued the-then $7 billion FUM Fisher at about $200 million.
Similarly, in 2012 Kiwibank paid over $50 million for Gareth Morgan Investments, which reported FUM of $1.5 billion in that year.
Pie founder, Mike Taylor, told press the latest capital-raising was intended to fast-forward the boutique manager’s growth. From its origins as a niche Australasian small caps manager, Pie has branched out into other asset classes across a range of 10 retail funds and a KiwiSaver scheme, Juno, launched last year.
Juno reported over 1,300 members and about $30 million under management as at the end of March.
However, Pie has seen some staff changes of late including the recent departure of Elliott Jackson – who ran the group’s satellite Havelock office until April this year – and client relationship manager, Renei Kingi.
Jacqueline Taylor also exited as head of Juno this year after stepping down from a brief stint on the Pie board last November.
Collectively, Mike and Jacqueline Taylor own 38 per cent of Pie in a register of 14 shareholders that also includes former ASB and Commonwealth Bank of Australia chief, Sir Ralph Norris.
The Auckland-headquartered manager reported a net profit of more than $5 million in the 12 months to March 31, 2018, on revenue of about $16.7 million (split almost equally between management and performance fees).
As of this April, Pie dumped its performance fee model in favour of fixed assets under management fees ranging from 0.7 per cent for the group’s conservative product to 1.85 per cent for most growth-oriented funds.
Pie was not available for comment prior to publication.
Across the Tasman last week another boutique funds management hook-up was revealed as Ellerston Capital took a controlling stake in Morphic Asset Management.
Jack Lowenstein, Morphic co-founder, said in a release: “We believe that under the wing of Ellerston, we gain access to Ellerston’s experienced investment team and we substantially improve our reach to investors whose aim is to build wealth by following the principles of socially responsible investing.”
Morphic is distributed in NZ via the InvestNow platform.