Kiwibank buys Gareth Morgan Investments
Kiwibank has bought Gareth Morgan Investments (GMI) and its KiwiSaver scheme.
The amount the state-owned bank paid for GMI, which manages more than $1.5 billion in funds, has not been disclosed.
GMI founder Gareth Morgan said he initiated the sale to free himself up to focus on strategic investment work and private wealth management.
The fund manager, which Mr Morgan founded to look after his own money, had grown to more than 50 staff.
“To be perfectly honest with you, I don’t want to manage 50. I can handle about 10,” Mr Morgan said.
“What I’ve been finding the last couple of years is too much of my time is taken up with my non-core competency areas. I’m just not good at dealing with everyone’s personal problems.
“I’m pretty excited to have the monkey off my back.”
Gareth Morgan will remain a director and major client of the business and a member of the investment strategy team.
GMI will operate as a stand-alone entity under the Kiwibank Wealth and Insurance division.
Kiwibank chief executive Paul Brock said the deal had been funded through a term facility and impact on the bank's profits (which halved to $24.6 million last year) would be "positive".
Buying GMI, which manages 650 million KiwiSaver funds on behalf of more than 57,000 clients, would help Kiwibank grow its wealth division, Mr Brock said.
Kiwibank started its own KiwiSaver scheme just over a year ago and while growth has been impressive, with 15,000 customers, there was a need to extend its investment management capability, said Mr Brock.
“Our plan to do this looked very much like what GMI has developed.”
Kiwibank was launched in 2002 and has about 800,000 customers.
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Comments and questions79
Can anyone date accurately when Morgan moved to full communism?
Quoting him: "Kiwibank is an iconic Kiwi business that we can all identify with."
Only if you believe in State ownership of assets, and the planned economy, Gareth.
Seething, as usual, when I watch the Statist train wreck him and his firm have become.
On the other hand , it does seem as though Gareth is cashing up.
The bleeding heart stuff may be a smokescreen.
The real question must be; where is he stashing it, and for what.
A bit harsh...but I can see why many would concur. I am always respectful of philanthropy ...a very western & civilised philosophy it seems, but Gareth started to go adrift about the time of the global warming debate...strange considering I used to hang on his every word.
Smart move by Gareth - he knows the coming market meltdown (in equities, bonds, the lot) will destroy Kiwisaver and he got out while the going was good. There will be a lot of very hacked off punters in years to come trapped in Kiwisaver accounts being blown apart by the on-going crisis - they wont be getting mad at Gareth though. GM is peakoil aware, he knows what it means, sat bye bye to growth.
Hmm, wonder how much they have paid for the 'train wreck'?
Perhaps Tribless is a mite jealous?
Sell out.
No surprises there with his constant verbal diarrhea in the media championing his firm as crusaders of the funds management industry. When all along he was indirectly fleecing investors more than the average manager whilst under performing the market.
Was always in it for a quick buck.
Go buy some decent players for the Phoenix with your 'hard earned' windfall.
Meanwhile Matt, you keep working away at your 9 to 5 poppy harvesting job with no hope of ever building your own business, let alone creating one valuable enough to sell (with the job creation that goes with it).
Was this cash-up to pay for blanket man's funeral ?
Tribeless - follow his motorbike & it's "climate change" travels!
Good for him he sold out and he doesn't have the stress anymore.
Let's hope the new managers deliver better returns than the miserable performance of the fund for his kiwisavers.
I was always unimpressed how he courted a celebrity persona, leaping into media opportunities while his funds did badly.
It is good to see him recognize his weaknesses after the fact.
Wow was not Morgan for Asset sales yet will sell out to the state.
Seething, how does this benefit Kiwibanks operations more crony-capitalism - the powerful cronies in NZ looking after each other.
Kiwibanks should be focusing on repairing its crappy loan book or maybe taking some of the SCF stuff not entering unchartered water in wealth management.
Arragh NZ WTF!!
Will KiwiSaver use the fixed interest GMI funds to leverage and provide more housing mortgages.Another spurt into an already over priced housing market.There goes the bubble again.
If it pops will the poeple ever be able to kiwisaver contributions back?Not likely
Another twist and turn in the murky world of New Zealnd finance
Good on you Gareth!
Congratulations for achieving the sale of your business- KiwiBank would have done it's due diligence and a fair price achieved.
Don't listen to all the tall poppies bemoaning everything every chance they get... HR Managers and SME owners the world over know what it's like having an adult kindergarten... I mean staff, so take the money and run!
One good investment with TradeMe, and the whole of NZ thinks that Gareth is a genius.
Usual NZ investors' and market behavior, sadly.
What has been the performances of GI funds?
BIG FAT minus return after 4.5 years.
Go figure.
Banks have been involved in wealth management for many years, its an easy market to tap, as they have the clients account in front of them. On the other hand anyone who has used funds when investing, and has used bank owned and operated funds will for the most part have been on the down side when the returns, if any, were dished out. It’s a match made in heaven, Kiwi& Morgan, people invested with GMI thru Morgans rhetoric, he always had the one liner the media loved, was never scared to talk down other companies, but most of all people overlooked his failing in the investment arena. They will continue to do this with Kiwi Bank. It would be interesting to know how much they paid and what is the expected return.
Is he going to pay Capital Gains Tax like he and son Sam were banking on about before election?
Why should he?
Better he keeps the gains and distributes to charities as he sees fit.
Thats where he does outshine the likes of Eric Watson, Mark Hotchin, Doug Myers, Charles Bidwell, Michael Fay, David Richwhite etc.
Tribeless and his like have few followers.
Gareth Morgan has many followers.
Gareth Morgan has made enough money to allow him to do whatever he wants.
Tribeless languishes in a job he dislikes,and is jealous of Gareth.
Well at least Solidarity picked a handle from the apprpriate part of the political spectrum to be supporting Jesus Morgan.
It's not about tall poppy syndrome. Some of us, free men, understand that our long term freedom, and our long term prosperity, turns on a free market and limited government. Morgan just grew the government. The commission of every one of his investors - many of whom wouldn't agree with Nanny State government- now goes to grow the welfare state and the growing tax take needed to contain the violence of it, plus the violence of the coercive Big Brother State to extract it.
That's what he's sold out. My freedom, again.
Point being that any tax paid to NZ government disappears into wasteful spending like Maori TV, ministers' overseas trips, useless do-nothing-but-follow-party-directives NZ First and Greens MPs etc.
Better Gareth distributes to real needy causes, as he sees fit.
It looks like the only independent KiwiSaver firm of note is Fisher Funds. All the others are banks, insurance companies.
I guess this is because compliance costs are huge in KiwiSaver, and arguably too much for most independent companies to bear.
Dealing with corporate trustees is very very difficult too. Expensive software, high registry costs.
And then there is the incessant poaching between firms. Banks have it easy because they have clients coming into branches all the time for insurance/mortgages/loans, and can put a wee tick box on the insurance/mortgage form that says "I agree to have all my business with UsuryBank and agree to transfer my KiwiSaver to UsuryBank."
Because before the election he religiously told everyone this is what should happen in NZ. Now is the time to put his money where his mouth is. Or is he really just a talking head and not a man of conviction?
If the government had passed a capital gains tax law, yes.
But National will not do so - remember Key and Nationals are all about keeping their wealth.
Remember Muldoon's famous saying? "To leave NZ as I find it."
Very sad to see the tall poppy syndrome is alive and well in NZ. Nicely done Gareth.
"tall poppy syndrome" perhaps the most over used cliche in NZ. Nicely done
Again, it's not about tall poppy syndrome. I would've been one of the first to congratulate Gareth and Sam on their success with the Trademe sale. But this is nothing like that. Since Trademe Gareth has been, in the most patronising manner, talking down to us from the Road to Damascus.
Some of us, free men, understand that our long term freedom, and our long term prosperity, turns on a free market and limited government. Jesus Morgan just grew the government. The commission of every one of his investors - many of whom wouldn't agree with the Nanny State - now goes to grow the welfare state and the growing tax take needed to contain the violence of it, plus the violence of the coercive Big Brother State to extract it.
That's what he's sold out. My freedom, again.
If he'd sold it to a private sector firm, I would've been applauding him.
Quote: "remember Key and Nationals are all about keeping their wealth"
Yeah, LOL, mustn't let people keep their wealth. How unfair would that be.
Another thread signed on the way to the Gulag of Good Intentions.
If you are having trouble managing staff you hire a HR manager, not sell the company.
There is much more to this than Gareth has made public.
Contrast, Tribeless, "Keeping their wealth" as opposed to "Growing their wealth."
That's why NZ under National always go backwards - witness the Muldoon, Bolger and now, Key years.
National plays "not to lose" as opposed to "Play to win." Subtle difference but big impact.
Tribeless,
NZ would have been a much much more prosperous country if we had a compulsory savings scheme like other countries have. Instead, National scraped the scheme in 1976 and NZ has been going backwards ever since.
So much for your gulag bs.
The Gypsy professed to be an expert and bag almost every other fund manager in the world.
He used Climate change BS and vulnerable ex finance company OC's to build up a funds base and he now jumps.
Just goes to show Gypsy's can't be trusted.
So why, in your opinion, shouldn't people 'keep their wealth'?
By what moral right to you propose to take their wealth from them?
For what use?
Your ludicrous statement, quote, "That's why NZ under National always go backwards" is not possible to answer to, other than to say if you think Muldoon was a free marketer, or defender of capitalism, you are deluded. As for Key, I don't vote for him, but there is the GFC, despite which NZ is doing okay, thanks to deregulated farming sector.
You can't just go and pay a CGT that doesn't exist.
You've got good business sense, Gareth.
It's better to flick it off at a good price before the whole Kiwisaver scheme come crashing down.
Not to sure about your global warming hoo-haa though.
I've nothing against savings, I'm a net saver, it's just the 'compulsory' I object to. The way to encourage savings is to stop paying the state pension and move to limited government. That way we have both savings and freedom, because we don't need the bureaucracy to run compulsory savings.
Freedom and prosperity = limited government, rule of law, free markets.
Bleat all you want, that's the only equation that works. My proof is history.
Tribeless, you are assuming that NZ is a land of financial literates. Unfortunately, we know that this is NOT the case. That's why complusory savings make sense. By all means include a DYI option for the financially literate.
Why do we have so many financial illiterates? For the same reason we have so many illiterates - dumbed down State education, that is, Nanny Statism.
Just as you don't solve the problems caused by welfare - which are destroying us - by more welfare, nor do you engender self responsibility my compulsorily running peoples lives. Indeed, you just make it worse. That's why the West is currently turning out so many children from our schools who don't have the basic literacy and numeracy skills to be employable.
The minute you go to State compulsion, you're heading to a country where freedom will be snuffed out. And country-wide bankruptcy.
Now name me some countries with compulsory savings that are better placed that NZ for the wave of baby boomers about to retire over next fifteen years?
Tribeless, you should move to Somalia. Limited government and a free market. What are you waiting for?
I agree completely with Tribeless.
Maybe ASX can let me know:
1. How compulsory savings overcomes the classic socialist problem of calculation? How much should be saved? For how long? Where? Without a free market signalling this; all state decisions will be arbitrary.
2. Do you know what happens with the provider of any goods / service (and savings is a monetary good) when he no longer needs to satisfy consumers in a free market, but rather gets his "contributions" by force and coercion? That is a technical monopoly and costs go up and service quality down.
--- There was once people in this world who got free healthcare, guaranteed jobs, free housing and free food. They were called slaves. ---
Maybe do some educated reading before quoting Somalia as a case. The reason Somalia is the way it is, is as a direct result of the state. The economist Peter Leeson found:
:Comparing the last five years under the central government (1985–1990) with the most recent five years of anarchy (2000–2005), Leeson finds these welfare changes:
•Life expectancy increased from 46 to 48.5 years. This is a poor expectancy as compared with developed countries. But in any measurement of welfare, what is important to observe is not where a population stands at a given time, but what is the trend. Is the trend positive, or is it the reverse?
•Number of one-year-olds fully immunized against measles rose from 30 to 40 percent.
•Number of physicians per 100,000 population rose from 3.4 to 4.
•Number of infants with low birth weight fell from 16 per thousand to 0.3 — almost none.
•Infant mortality per 1,000 births fell from 152 to 114.9.
•Maternal mortality per 100,000 births fell from 1,600 to 1,100.
•Percent of population with access to sanitation rose from 18 to 26.
•Percent of population with access to at least one health facility rose from 28 to 54.8.
•Percent of population in extreme poverty (i.e., less than $1 per day) fell from 60 to 43.2.
•Radios per thousand population rose from 4 to 98.5.
•Telephones per thousand population rose from 1.9 to 14.9.
•TVs per 1,000 population rose from 1.2 to 3.7.
•Fatalities due to measles fell from 8,000 to 5,600.
Yep I'm sure if we had a whip round we'd soon get the fair together to send him to Somalia. It would be worth it to put an end to his whining. I often wonder what he would have done if his CChurch house had actually come down upon his head when the quake struck, trapping him and his family. No doubt he would still be waiting for the private sector to come and rescue him (having turned down all offers from State agencies to dig him out).
Well looky here, Tribeless has a special little mate. Make that a second seat booked for Mike Bravo for Mogadishu.
Crowd pleaser, your are such a negative little person. I feel for any one that has to be around you...must be tough.
Cheers Mike. What have we come to when I have to say what a breath of fresh air it is to see someone on a business blog in a Western economy that understands the philosophic and economic importance of free markets?
As for the 'clever ones' above pulling out the tired Somalia nonsense, you need to read why Somalia is nothing like a Libertarian/Free state. Truly, you do. Outside of that can I suggest you debate on facts, rather than ad hominem.
By all means crowd pleaser. I'll go to Somalia if you go to Zimbabwe. They have a wonderfully developed state over there.
By all means crowd pleaser. I'll go to Somalia if you go to Zimbabwe. They have a wonderfully developed state over there.
Australia and Singapore - two countries with difference economic profiles - compulsory super and both well placed for next 50 years, forget 15 years, compared to NZ.
Blaming financial illeterates on the state education system is a cop-out. Almost like the rubbish about NZ needing to take responsibility for the spate of infant killings in NZ.
Case in point of the folly of unbridled free market - Telecom provided a world class telecommunication service to NZ as a SOE. Under free market private enterprise, it is a shadow of its former self - stripped clean by the Americans and burdened with debt.
Good one, Crowd pleaser - nail straight on the head and they know it.
Blimey Tribeless you dont have to start inventing monickers just to have a go at me. I reckon I must have struck gold with my quip about waiting for the private sector to dig you out eh fellah?
Actually MB I rathered enjoyed visiting Zimbabwe in its previous incarnation as Rhodesia - a better sort of person running the show back then.
In regard to Kiwisaver,you tout the unsucessful Fisher Funds but omit the best performer,Milford Asset management.
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