Grosvenor ups Kiwisaver stake
Another KiwiSaver fund is changing hands, the latest in a series of deals, writes Rob Stock Fidelity Life has sold the management of its KiwiSaver scheme to rival Grosvenor Financial Services Group in a cash and equity deal.
Investors in Fidelity’s KiwiSaver scheme will initially see no change, but in time the scheme is expected to be merged with the Grosvenor KiwiSaver scheme.
The deal will see Grosvenor leap up the KiwiSaver rankings by putting it in control of assets worth more than $600 million on behalf of nearly 100,000 members, making it the country’s seventh-largest KiwiSaver manager.
For Fidelity Life the deal will allow it to continue distributing the scheme through the financial and insurance advisers it sells life insurance through.
In return, it will get an ownership stake in Grosvenor and an undisclosed amount of cash.
The deal allows Fidelity Life to focus on integrating the Tower life insurance business it bought from the listed company into its own lifeinsurance operation.
The link-up with Grosvenor also strengthen’s Fidelity Life’s relationship with the independent financial advisers who use Grosvenor’s funds.
Fidelity and Grosvenor have had an insurance joint venture where the life company created a series of TriMax branded life, income protection, trauma and disability insurance products for Grosvenor’s advisers to sell.
Grosvenor’s managing director Allan Yeo said there was a good fit between the two companies, which were both New Zealand-owned.
After the deal is completed, Grosvenor, which has been managing funds for 15 years, will become the Fidelity KiwiSaver scheme’s issuer and manager.
Fidelity Life will take a minority shareholding in Grosvenor, with Yeo indicating the shareholding would be in the region of 10 per cent to 20 per cent.
Yeo said it was likely that in time there would be a move to merge the Grosvenor and Fidelity Life KiwiSaver schemes, but that would be subject to approval from the Financial Markets Authority, which had not yet been sought.
The deal is just the latest in a series that has seen many KiwiSavers change hands, including Fisher Funds buying the schemes of Tower, the credit unions and Huljich, AMP taking over the AXA scheme when it bought the company, and Kiwibank buying Gareth Morgan KiwiSaver.
Fidelity Life chief executive Milton Jennings said the alliance would allow the two companies to share resources for the benefit of their adviser networks.