Andrew Bayly's Vision for KiwiSaver's Transformative Growth
Deal News | Dec 14, 2024 | EIN
New Zealand's Commerce and Consumer Affairs Minister, Andrew Bayly, has suggested that KiwiSaver fund providers might undergo mergers and acquisitions following new reforms that allow investments in private assets. Announcing capital market rules, Bayly aims to enhance long-term returns and foster economic growth by enabling KiwiSaver providers to invest in the $120 billion currently under KiwiSaver management. Historically, only 3% of these funds are dedicated to unlisted assets as opposed to 16% in Australia. Interest.co.nz probed the potential of consolidation among the 30 active KiwiSaver providers. Bayly referenced previous consolidations, notably Fisher Funds’ acquisition of Kiwi Wealth for $310 million in 2022, a move enhancing Fisher's market share to 15%. Major providers like ANZ and ASB command 18.5% and 15.1% of the share, respectively, suggesting significant competitive dynamics at play. Fisher Funds emphasizes the potential of investing in nearly 1,000 profitable New Zealand enterprises valued between $20 to $100 million, aligning with the government’s ambition to reinvigorate local capital markets. This initiative is advocated by the Financial Services Council, which underscores the growth potential through unlocking domestic investments in unlisted assets.
Sectors
- Financial Services
- Mergers and Acquisitions
Geography
- New Zealand – KiwiSaver is a New Zealand-based investment product, and the discussed reforms and potential mergers affect the country's financial market directly.
Industry
- Financial Services – Involves companies that provide investment opportunities, management of savings accounts, and other capital market activities, relevant due to KiwiSaver's role and changes in investment rules.
- Mergers and Acquisitions – Refers to the aspect of potential M&A activity within the KiwiSaver providers, relevant as the article discusses potential consolidations in the market.
Financials
- $120 billion – Total assets currently managed by KiwiSaver funds.
- $310 million – The acquisition price paid by Fisher Funds for Kiwi Wealth.
- $17.6 billion – Assets under management by Fisher Funds post-acquisition.
- $21.8 billion – Assets under management by ANZ, the largest KiwiSaver provider.
- $17.8 billion – Assets under management by ASB, the second-largest KiwiSaver provider.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Andrew Bayly | Commerce and Consumer Affairs Minister | People | Government official advocating for capital market reforms affecting KiwiSaver investments. |
| Fisher Funds | KiwiSaver Provider | Companies | Third-largest KiwiSaver provider, known for acquiring Kiwi Wealth to expand its market share. |
| Kiwi Wealth | Target Company | Companies | Wealth management firm and KiwiSaver provider acquired by Fisher Funds. |
| ANZ | KiwiSaver Provider | Companies | The largest KiwiSaver provider with a significant share of the market. |
| ASB | KiwiSaver Provider | Companies | Second-largest KiwiSaver provider with a substantial market share. |
| Financial Services Council | Other Company | Companies | Industry body supporting the government's reforms on KiwiSaver investment in private assets. |
| Kirk Hope | Chief Executive of Financial Services Council | People | Leader of the Financial Services Council, supports the capital market rules for KiwiSaver investments. |