Funds management has emerged as the biggest money-spinner for the NZ stock exchange, outpacing the next-largest business unit by almost $9 million for the year to September 30.
According to the latest NZX statistics, the Smartshares division earned almost $27.5 million for the first nine months of 2023 compared to just over $19 million for traditional stock exchange secondary markets services.
For the same period last year funds management delivered about $17.9 million to the NZX top line versus $19.2 million for trading and related activities.
While core NZ stock exchange business lines reported slightly negative year-on-year operating income growth for the nine-month periods, the funds arm soared more than 54 per cent as revenue from the recent QuayStreet and ASB master trust bolt-on buys flowed through the corporate veins.
QuayStreet generated about $4.6 million for Smartshares for the year to the end of September after entering official NZX accounts this February while the ASB master trust tipped in a further $450,000 or so. The exchange bought the $1.8 billion ASB master trust as at February 2022 but only completed the switch to underlying Smartshares funds in September this year.
The NZX has spent about $90 million buying funds management assets, staring with its $35 million outlay for SuperLife in 2014 followed by $25 million for the ASB master trust and $31 million for QuayStreet.
As well, the move into wealth management has cost the local bourse a further $30 million plus through the purchase and development of the Wealth Technologies platform.
The NZX-owned platform saw revenue rise 8.4 per cent year-on-year over the nine months to September 30 to reach almost $4.9 million funds under administration ticked over the $11 billion mark.
Combined the funds management and investment admin units represent about 40 per cent of the NZX total revenue of $81.8 million for the nine-month period.
Most other nine-month income lines for the business were flat or negative year-on-year aside from dairy derivatives – doubling to almost $2.7 million – and indices, which rose roughly 46 per cent to $1.2 million.
Former Hobson Wealth chief operating officer, Anna Scott, joined the NZX as Smartshares chief in September to replace Hugh Stevens, who resigned at the beginning of 2023. Last week Stevens joined the Australian exchange-traded fund specialist, Betashares, as NZ executive director.
Meanwhile, Mint Asset Management head of sales and marketing, David Boyle, is set to leave the business by year-end. The NZ industry veteran joined Mint in mid-2018 following an almost four-year stint at the Commission for Financial Capability as general manager education. Previously, he served about 17 years in distribution roles for ANZ funds management and its precursor businesses – ING and Armstrong Jones.
In a release, Mint says Boyle would “pursue his passion for KiwiSaver and helping Kiwis to improve their financial capability” with a few governance roles also on the horizon.
Matthew Hanchett joins Mint from Generate in a new position as head of retail distribution to take on some of Boyle’s responsibilities. Kirsten Boldarin, hired as Mint head of distribution this February, will also assume some duties from Boyle.
Mint chief, Rebecca Thomas, said in a statement: “David has been an integral part of the Mint team for a long time, helping us to grow our brand and funds under management. We’ll be really sad to see him go, but it will come as no surprise to most people that he wants to devote more time to helping New Zealanders with their everyday money matters, so they can improve their financial wellbeing.”