Carmel Fisher on Tower, TSB and Takapuna
Sitting at the board table of her Takapuna headquarters, Carmel Fisher motions towards the beach below and Rangitoto's volcanic cone across the water.
"Who wouldn't want to work in this setting?" she asks, mentioning her staff is stacked with surfers.
That answers that question, then.
The straight-shooting, fast-talking founder of Fisher Funds quashes the "silly" idea of maintaining two Auckland offices in the wake of the Tower Investments purchase, and whether she'd want to be based in the city instead of the North Shore.
"We're not moving from Takapuna. I live down the end of the beach so I'm not really going to want to go over the bridge every day."
Ms Fisher set up her company 15 years ago to offer a new face from the usual banks and insurance companies.
With the $79 million Tower deal the company will have $5.5 billion under management and 260,000 clients.
Why are details of the deal confidential?
"If our capital structure had been disclosed now that would have been the only thing the media would have focused on. And I really don't think it's all that important."
It will come out in the annual accounts, she says, and clients don't need to know because none of their funds were used.
"It's like if somebody buys a house you don't automatically say, 'How much did you get as a mortgage and what's your interest rate?' And yet that's exactly what people want to know with this transaction which seems a bit odd."
As for the $79 million price, Ms Fisher's happy. It wasn't a steal, she says, but she also doesn't think her company overpaid.
"It's what we do for a living – value companies – and we pride ourselves on not overpaying.
"We've paid less than what we've valued it at, so that's always a good feeling."
She thinks any culture change between the two fund managers is overstated.
It's not as simple as saying Fisher's a growth manager and Tower's a value manager, she says.
"For instance, in the two New Zealand funds, or transTasman funds, there's quite a lot of overlap of New Zealand that we both own.
"You can't have a different investment style and own the same stocks – it doesn't work that way."
Doffing the cap
A rival fund manager says Ms Fisher should be given her dues.
“I shouldn’t say these things, but it’s not easy being a woman in a man’s game and she’s proved to be very, very successful.”
The fund manager, speaking anonymously to NBR ONLINE, says Ms Fisher's main strength was her marketing: fronting a national roadshow to small, provincial centres before anyone else.
She's also very tough, he says.
At a Marlin Global shareholder meeting last year she faced down a challenge from activist investor Elevation Capital to try and dislodge Fisher Funds as manager and wind up the fund.
"If you watched her that day, up there on the podium, just staring down at the audience and being absolutely determined that Chris Swasbrook was not going to disrupt her company and win that battle that way.
"I thought that day reflected her personality quite strongly – her steely look and her determination."
She's going to need that toughness, he says, because the industry doesn't have a happy history of smaller firms taking over bigger ones.
"I'm not saying that she won't do it – she's going to be challenged."
First things first
Ms Fisher's first challenge is amalgamating Tower with Fisher.
Tower employ 69 people, while Fisher Funds employ 28, and Tower runs some funds its new owner doesn't.
Tower has properties in Auckland and Wellington, while Fisher Funds is based in Takapuna – where it has already leased extra space.
Fisher Funds has the right to use the Tower brand for 12 months but Ms Fisher wants to move more quickly than that. Her first priority is identifying duplications and giving nervous staff some certainty.
"I don't believe in dragging things out too long but you've got to take people with you."
There's also the relationship with TSB. Through the purchase, TSB will have access to wealth management and Kiwisaver, while Fisher will get access to TSB clients through its branch network.
It's the second strategic shareholder for Fisher Funds, after infrastructure investor HRL Morrison & Co took a 26% stake in 2008, which already makes for lively board table.
"There's fairly robust discussion internally as well, don't you worry. We've got a performance culture and that translates into robust discussions on most things – which, fortunately, I happen to enjoy."
Tower's extra scale will allow Fisher Funds to lower fees "over time", shortcircuiting one of her critics' biggest beefs.
Despite the prominent debate about Fisher's fees, Ms Fisher says they're "not uncompetitive".
Even the likes of Morningstar have said, yes, they’re at the higher end but they also acknowledge they’re at the higher end when we earn a performance fee.
“Particularly with Kiwisaver there are only two fund managers that charge performance fees so we are always going to stand out.
“It’s not my fault they haven’t got performance fees, but in terms of base fees we can be compared like-for-like.
“I don’t think that we are uncompetitive so I don’t know why it keeps coming up."
Performance-wise, Morningstar Research’s December quarter analysis of KiwiSaver funds lists Fisher’s conservative fund second for one-year returns but 11th of 14 over three years.
Her aggressive fund’s 15.5% gain over the year puts it third, but it is seventh of 11 over three years.