Fidelity Life KiwiSaver sold to Grosvenor
Only months after buying Tower’s life insurance business, Fidelity Life has sold its KiwiSaver scheme to fellow New Zealand firm Grosvenor Financial Services.
The deal continues the trend of industry consolidation in the past couple of years that has included AMP buying Axa, Fisher Funds buying Tower and Kiwibank buying Gareth Morgan Investments.
Once the transaction is complete Grosvenor’s KiwiSaver scheme will have more than $600m under management across nearly 100,000 members.
Grosvenor has indicated it is keen on getting default status when the government completes its review of KiwiSaver default providers next year.
It will be one of the country’s largest New Zealand-owned and operated KiwiSaver providers – and the seventh largest overall.
Terms of the transaction remain confidential. However, as part of the deal, Fidelity Life will take a minority shareholding in Grosvenor.
“This is about two successful New Zealand owned companies working in a strategic alliance that allows them to focus on what each of them does best,” says Grosvenor managing director, Allan Yeo.
“In addition, there is strong synergy between the two companies, both are dedicated and loyal advocates of New Zealand’s thriving independent adviser network.”
Mr Yeo also says the transaction “puts the combined organisations in a strong position to gain default provider status in the future.”
Fidelity Life CEO Milton Jennings says the company will continue to work with Grosvenor on investment-related issues while focusing on its core business of providing risk products. .
“Both companies have proud local roots, strong networks of non-aligned advisers and have worked together in the past,” says Mr Jennings.
“This alliance will allow the two companies to share resources – services, products and support – for the benefit of our adviser networks.
In addition, our large pool of clients will benefit from being with a trusted KiwiSaver provider that is owned and operated by New Zealanders that genuinely have the interests of Kiwis at heart.”
The type, range and costs of funds to existing members will not change as a result of the deal.
A formal agreement between Grosvenor and Fidelity Life is now in place and the transaction is expected to be completed by September.