Jarden views investment banking and wealth management as “a dis-synergy”

Jarden now views its wealth management and advice business and its investment banking activities as “quite disconnected” and that's the thinking that's led to the decision to hive off wealth management into a separate vehicle called FirstCape, says FirstCape's first chief executive Malcolm Jackson.

Tuesday, December 19th 2023, 6:05AM

by Jenny Ruth

“Going back decades, wealth or the broking would've been the distribution for the investment bank” but now “almost a dis-synergy” has developed, Jackson told GoodReturns.

“From a regulatory and operational perspective, its more effective to have them running separately,” he says.

FirstCape will be the merger of Jarden and National Australia Bank (NAB) wealth advice and management businesses, including JB Were's New Zealand operations and BNZ's KiwiSaver scheme, as well as Harbour Asset Management.

While Jarden will retain 20% and NAB will own 45%, the other 35% is being sold to Pacific Equity Partners (PEP) for an undisclosed sum.

Jackson is currently chief executive of Jarden wealth and asset management.

The intention is to continue to run the different brands with both Jarden's wealth management and JB Were continuing to target “ultra high-net worth” investors.

“Both do it in different ways for different client bases with different needs” but both work at “developing very personalised solutions” for those investors.

The addition of BNZ will provide Harbour with a retail distribution avenue, Jackson says.

“For Harbour, it's an expansion into the retail distribution market alongside its market-leading position in institutional” funds management.

He doesn't view the combined group as vertical integration but as a collection of “verticals,” Jackson says.

FirstCape will have $29 billion in funds under advice and administration and another $15 billion of funds under management (FUM) – Harbour currently has about $8 billion FUM – and will employ 113 advisers.

The merger is subject to regulatory approvals and practical completion is expected in the first half of 2024. In the meantime, the three advice businesses, JB Were, Jarden and BNZ, will continue to operate with no changes in the way they serve clients.

Last year, Jarden and PEP vied to buy the Kiwi Wealth business but Fisher Funds Management was the successful bidder, paying $310 million for the business.

Earlier this year in its annual report, Jarden announced its plan to separate the wealth business from its other activities.

Tags: Jarden