Pie Funds has abandoned plans to sell off part of the business after failing to secure a suitable buyer in a deal that reportedly valued the $1billion boutique at about $100 million.
In a statement issued late on Friday, Pie founder, Mike Taylor, said the board decided to pursue “an internal management proposal” after more than 50 NZ and international firms reviewed the offer.
It is understood the deal included the options of either a 25 per cent or 75 per cent stake in Pie (including its Juno KiwiSaver scheme) with prospective buyers to stump up $25 million or $75 million, respectively.
“Multiple non-binding indicative proposals were received, reinforcing the value Pie and JUNO have created and recognising the solid growth to date, but, when considering strategic capabilities and fit, none were superior to management’s plan,” Taylor said in the release.
Pie engaged KPMG in May this year to find an equity partner following a board push to explore growth options for the now 12-year old funds management firm.
“The partnership search was motivated by the potential for new capabilities to add value to Pie and JUNO’s growth, not a need for additional capital,” Taylor said.
Paul Gregory, Pie head of investments, said the firm was primarily looking for an equity partner with a compelling distribution offer.
“And we simply did not get any proposal which was as good or better than [Pie’s internal growth plans] and had a distribution solution,” Gregory said.
He said the manager’s KiwiSaver, global and multi-strategy funds would drive longer-term growth rather than the “quite mature” Australasian small cap funds that Pie built its reputation on.
“The core Australasian products have a natural cap on assets under management for capacity reasons, as all small cap does if you’re serious about maintaining your ability to generate outperformance for clients,” Gregory said.
Meanwhile, Pie would continue to focus on active management (with boots on the ground now in Sydney and London), building its advice arm, growing the flat-fee Juno scheme, and further integrating environmental, social and governance (ESG) into the investment process.
Gregory said Pie also embedded the ESG ethos into the Juno KiwiSaver with low, transparent fees and a “financial education effort”.
He said Juno recently appointed a financial literacy teacher to educate children and employers.
After a bumper few years, Pie reported a 40 per cent drop in profit for the 12-month period to March 31 this year, reflecting the firm’s recent aggressive growth trajectory that include: launching the Juno scheme in 2017; opening offices in both Hawke’s Bay and London; and, creating a new financial advisory arm.
Last week Pie also named former ANZ head of wealth products, Ana-Marie Lockyer as director, bringing the total board membership to six.
Lockyer was appointed as head of the new AA Finance business in June after ending an almost 10-year relationship with ANZ wealth last December.
Among other duties, Lockyer was responsible for growing the ANZ KiwiSaver schemes.
The Pie statement says she will also serve on the group’s KiwiSaver and wealth advice committees.
Mike and Jacqueline Taylor own about 40 per cent of Pie in a share register that also includes some high-profile names such as former Commonwealth Bank of Australia and ASB chief, Ralph Norris, and Brendan Lindsay, founder of the NZ plasticware firm Sistema that was sold in 2016 for $660 million.