NZX boss indicates no big plans for Fundsource

NZX chief executive Tim Bennett has indicated there is no growth strategy for research house Fundsource.

Wednesday, February 18th 2015, 6:00AM

by Susan Edmunds

NZX announced its annual results yesterday. Revenues for the year of $65.2 million were up 3.8% on 2013, driven by growth in NZX’s capital markets and funds management businesses.

Bennett said Fundsource provided very comprehensive data. “We’d like that to continue from a market perspective.”

But there were no big plans for expansion.

Although it produced only a small amount of NZX’s revenue, Bennett said he was comfortable with how Fundsource was operating. “The focus is on large parts of the business, the small parts that are going well we don’t spend as much time on.”

Head of exchange-traded products Sam Stanley has responsibility for the NZX-research house, which has been operating since 1987.

He said the business would not be adding to its staff numbers but it would not be standing still.

He said it had invested in a new analytic and fund research tool and planned to grow its client and adviser base.

“Growing the client base should translate to higher revenues. We’ve come quite a long way in the past few years from struggling in fourth place to now being up around the top two spots. But there’s still a lot of work to be done.”

Two of Fundsource’s main competitors – Van Eyk and Lonsec – have left the market. Another, Morningstar, has dialled down its New Zealand presence.

Fundsource would work on building its brand and expanding its reach through advisers and fund managers, he said, and getting more qualitative reviews under way.

But Stanley agreed Fundsource did not deliver much to the bottom line of the NZX. It is reported under data services, which makes up about 16% of NZX revenue. But FundSource is only a small part of that.

"I don’t see that changing. From an analyst point of view we’re not going to move the dial. But there are positive things going on.”

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