FNZC sells funds to Fisher
Sharebroker First New Zealand Capital (FNZC) is exiting the retail equity fund business and has sold its Abacus Alpha Fund and KiwiSaver scheme to Fisher Funds.
Friday, October 22nd 2010, 12:02AM
by Jenha White
FNZC investment director Malcolm Davie says the firm has decided to exit the retail equity managed fund business as it is becoming "increasingly complex and economies of scale are critical in helping to offset the costs incurred in managing funds."
The FNZC Abacus Alpha Fund, "while delivering satisfactory relative performance, has not grown sufficiently in total size to cover the costs of managing the fund."
FNZC says it is committed to ensuring its clients investment needs are well looked after in the future and believes Fisher Funds is well placed to assist them with $850 million under management and with its investment performance "in our view proven over the long term".
Fisher Funds managing director Carmel Fisher says the Abacus Alpha Fund is being renamed the Fisher Funds Trans Tasman Fund.
She says Fisher Funds has got a similar investment style to how it has been managed in the past with a high conviction, concentrated portfolio, which includes choosing the best companies that can be found.
Fisher thinks the new fund will appeal to investors.
"We often have investors look at our Australian fund and our New Zealand fund and they are not able to decide which one to go for, so they'll have 50% of each and create their own trans tasman fund."
"This will be the first trans-tasman fund for investors to choose from."
She says Fisher Funds was also interested in buying the FNZC KiwiSaver scheme because it is good quality with a similar investment philosophy to Fisher Funds "making it quite a seamless transition for investors".
Before Fisher Funds takes over the KiwiSaver scheme, it has to go through a bulk transfer approved by the Government actuary.
This means KiwiSaver members have a month to write submissions if they don't want to transfer into the Fisher Funds scheme.
The FNZC scheme has previously been managed as a growth scheme and will become part of the Fisher Funds KiwiSaver Growth scheme.
Fisher says it is interesting because a lot of people in the industry have been talking about consolidation in KiwiSaver with smaller funds deciding to sell or wind up and she is encouraged that consolidation appears to be happening.
"We're pleased to have the opportunity to add this fund to ours."
She says up to 40% of Fisher Funds new members in KiwiSaver are transfers from other schemes and she thinks that probably co-incides with three-year performance history, with people getting reports from their providers and starting to do comparisons.
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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