Managed funds pioneer exits

The country’s oldest online funds ‘‘supermarket’’ has been sold to the newest.

Wellington-based managed funds platform Investnow has bought the managed funds product line of Rabodirect, the specialist online savings business of Rabobank.

Rabodirect opened its online funds supermarket in 2006 before Kiwisaver popularised managed funds, with the revolutionary idea that people would want to invest in funds themselves without going through financial advisers.

It currently has around 3200 investors with $120 million in the 40 different funds it sold from the likes of AMP and Fisher Funds, all of whom keep tabs on their investment online through Rabodirect.

Investors will be invited to have their investments moved over to Investnow’s online platform.

Investnow set up its online funds supermarket earlier this year, and already has more than $100m in the funds it sells, including funds from AMP, Fisher Funds, Vanguard, Harbour and Mint.

The deal was struck after Rabobank decided to get out of funds retailing, and went looking for a company to look after the investors it had attracted, asking PWC to find the most suitable candidate.

‘‘The fact Investnow has attracted more than $100m under management in less than eight months clearly shows the New Zealand market is ready for a modern direct online fund service,’’ Investnow founder Anthony Edmonds said.

The price Investnow will pay depends on how much of the $120m of investments end up with it.

Edmonds said Investnow was well placed to take over what Rabodirect had developed.

Daryl Johnson, Rabobank New Zealand chief executive said

the decision to no longer offer the managed funds product line had been made to simplify the Rabodirect business model. Rabobank is predominantly a rural bank in New Zealand, and Rabodirect would continue to raise deposits to lend to the agriculture and food sectors.