Tyndall sale out of left field: Morningstar

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Despite getting a new parent company in the wake of its A$80 million acquisition by Nikko Asset Management, it will be “business as usual” for Tyndall Investments, according to Nikko AM head of Asia Blair Pickerell.

Wednesday, November 17th 2010, 5:00AM 4 Comments

by Benn Bathgate

Pickerell said Nikko AM had acquired an outstanding company with "an excellent brand name, very well known, we don't see any need to change it."

He also pointed out that Nikko has no presence in Australia or New Zealand so there would be no overlap - or job losses - and that the Tyndall brand will remain and the current management will be left to run the operation.

He said the Japanese investment firm has made the acquisition as part of its strategy to "grow into one of Asia's largest asset management companies."

Nikko AM is one of Japan's biggest investment companies and has a considerable presence in China and this acquisition gives the company a foothold in New Zealand and particularly Australia - "the fourth largest investment market in the world", Pickerell said.

Pickerell said Nikko would begin a dialogue with Tyndall investment managers both here and in Australia to ascertain whether the two markets could benefit from the "hundreds" of products Nikko AM can offer.

He also said thanks to its Japanese roots Nikko AM would be able to bring experience of operating in a low-interest rate climate and cited KiwiSaver and Australia's compulsory superannuation as significant attractions.

Asia's fast-expanding middle class was one of the drivers behind Nikko AM's expansion strategy and the company seeks to exploit the growing demand from that demographic for investment products.

"It's a leftfield purchase," said Morningstar co-head of fund research for Australasia Chris Douglas.

He said that while the deal was unexpected it made sense as Nikko AM "is getting a pretty decent Australian and new Zealand fund manager."

He said a takeover by Nikko AM rather than a fellow New Zealand firm was a preferred outcome as a domestic rival would likely merge the operations into one,  a  move that would reduce investment options in New Zealand.

"Early indications for the deal are very promising," Douglas said.

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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