TSB exercises option to buy rest of Fisher Funds, brings in US private equity firm
By Paul McBeth
Aug. 3 (BusinessDesk) - The TSB Community Trust, which owns New Plymouth's TSB Bank, has exercised an option to buy the rest of Fisher Funds Management for an undisclosed sum and plans to bring in US private equity firm TA Associates to take a minority shareholding.
The charitable trust exercised its right to buy out its co-shareholders in New Zealand's fifth-biggest fund manager, having initially bought a 26 percent stake in 2013 for $32.8 million through TSB Bank, and later lifted that holding to 49 percent. The trust's commercial arm has reached a deal to buy the 51 percent of Fisher Funds it doesn't already own, and separately agreed to sell a 24.99 percent stake to TA Associates with the intention that the US private equity firm's investment in the Kiwi fund manager will rise to 34 percent once various regulatory approvals are signed off.
"Our intention is to continue to build on the great business that exists today, adhering to its values and mission of making investing understandable, enjoyable and profitable for New Zealanders," TSB chairman Hayden Wano said in a statement. "We also are pleased to welcome TA Associates as an investor and partner alongside TSB Community Trust."
Fisher Funds was founded by high-profile fund manager Carmel Fisher, who stepped down from her executive role earlier this year, and has beefed up its presence in the sector, having bought Tower's former funds management business for $79 million in 2013 - a deal that TSB supported at the time. That acquisition followed earlier purchases of funds from First NZ Capital, Huljich Wealth Management and the New Zealand Association of Credit Unions during a period of consolidation in the KiwiSaver sector.
Carmel Fisher will stay on as a director of Fisher Funds, and newly appointed chief executive Bruce McLauchlan, who was poached from banking minnow Cooperative Bank, will continue to lead the financial services firm. Carmel Fisher and husband Hugh Fisher are the second biggest shareholders with 22 percent.
"Hugh and I are proud to have been able to help so many New Zealanders with their wealth and retirement savings over the past two decades, and we're pleased to hand over the future control of our business to a strong stable entity committed to delivering excellent investment returns and great client service into the future," Fisher said.
Fisher Funds manages $7.6 billion for more than 270,000 customers and generated a 12 percent increase in profit to $27.9 million in the year ended March 31 on a 3.1 percent gain in fee income to $69.1 million, according to its recently published 2017 annual report. The firm paid dividends totalling $27 million for the 2017 year, down from $30 million a year earlier.
The fund manager's total assets were valued at $106.6 million as at March 31, and it had total liabilities of $37.3 million, the bulk of which were $21.5 million of borrowings from Bank of New Zealand. Fisher Fund's net assets were $57.8 million as at March 31.
The deal is expected to settle this month.