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Kiwibank buys Gareth Morgan Investments

Kiwibank has bought Gareth Morgan Investments, including the Gareth Morgan KiwiSaver Scheme. 

Georgina Bond
Wed, 18 Jan 2012

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.



Georgina Bond
Wed, 18 Jan 2012
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Kiwibank buys Gareth Morgan Investments