Simplicity Promises Further Disruption As Funds Reach $4 Billion

Simplicity, a nonprofit fund manager and default KiwiSaver provider has just reached $4 billion of funds under management, with over 75,000 members in its KiwiSaver and Investment Funds.

Managing Director Sam Stubbs says this is “just the start” of their disruption across industries that have a history of charging excessive margins.

In the five years since inception, Simplicity has provided low cost KiwiSaver funds, Investment Funds and first home mortgages, with a strong focus on customer service and long term value creation for members.

Simplicity recently announced it was entering the affordable housing market, becoming a large-scale provider of affordable, quality build to rent homes in New Zealand’s major cities.

Mr Stubbs said KiwiSaver was slowly changing New Zealand’s business environment, and would soon fund a rolling wave of disruption across many industries.

“KiwiSaver will be funding disruptive business models that challenge the status quo. There are companies out there making excessive profits, with unsustainable business practices. They haven’t faced up to well-funded disruptors. That will change, as it has overseas,” he said.

“KiwiSaver now has $87 billion, which could easily be $200 billion by 2030. It will help fund disruption and innovation”, said Mr Stubbs.

“We’re seeing this now in financial services, with Simplicity and Sharesies notable innovators, shaking up the status quo. Expect to see it in other industries, and faster than many expect. For example, home construction is an inefficient industry, with a filo pastry of fees.There have always been ways to simplify and lower the cost of building, but never a combination of long term vision and reliable funding. KiwiSaver changes all that,” he said.

Several large KiwiSaver funds, including Milford, Booster and Simplicity, have been investing in venture capital and private equity in New Zealand. They have also seeded large technology focussed growth funds, such as the $110m expansion fund recently launched by Icehouse Ventures.

Simplicity was recently awarded Consumer NZ’s KiwiSaver ‘People’s Choice’ award for the second year in a row, and Canstar’s ‘Most Satisfied KiwiSaver Customers’ award for the third year in a row. It is also Morningstar’s ‘Fund Manager of the Year - KiwiSaver’ for 2021.

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