Fisher Funds buys Tower Investments
By Paul McBeth
Fisher Funds, the fund manager co-founded by Carmel Fisher, has extended its reach in the funds management business, buying Tower Investments for $79 million in a deal backed by new shareholder TSB Bank.
The deal will grow Fisher Funds' funds under management to more than $5 billion from its existing $1.4 billion, the company said in a statement.
It has acquired KiwiSaver portfolios of First NZ Capital, Huljich Wealth Management and the New Zealand Association of Credit Unions over the past three years.
Taranaki-based TSB is supporting the Tower purchase for an unspecified amount, and will take 26 percent of Fisher Funds, and get board representation.
"Tower's decision to sell its funds management business has created the opportunity for Fisher Funds to attain scale that will provide efficiencies in the management of clients' funds," managing director Carmel Fisher said.
"We anticipate that there will be synergies to be gained from the amalgamation of back office services and benefits of scale to be achieved from key suppliers which in time will flow through to investors in the form of a wider range of services and even more competitive fees," she said.
The acquisition comes as the government reviews the default KiwiSaver schemes, including Tower, with officials keen on aligning fund managers' incentives with long-term returns for investors.
TSB's involvement in the acquisition echoes KiwiBank's purchase of Gareth Morgan Investments last year.
Tower has been looking to sell its investment business since it completed a strategic review last year.
In November it sold sale of its medical insurance unit to ASX-listed Nib and its scaling back of its business comes as cornerstone shareholder Guinness Peat Group liquidates its portfolio.
"The focus for Tower going forward will be on growing our traditional core insurance business through offering superior products backed by market leading customer services," managing director Rob Flannagan said in a separate statement.
Fisher Funds has the right to use the Tower brand of 12 months from settlement, scheduled for April 2, and will manage Tower's internal funds for five years.