Fisher Funds' Huljich purchase price revealed

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Fisher Funds spent just under $21 million buying the troubled Huljich KiwiSaver scheme, new documents show.

Thursday, January 26th 2012, 9:34PM

by Niko Kloeten

The purchase price of $20.9 million was revealed in financial statements filed recently with the Companies Office by HWM (NZ) Holdings, the company formerly known as Huljich Wealth Management.

This equates to about $240 for each of the roughly 87,000 members Fisher Funds picked up from the Huljich KiwiSaver scheme, with total funds under management of about $191 million at the time of purchase (just under $2200 per member).

Fisher Funds bought the Huljich scheme in March last year following controversy over related-party payments made at the direction of former Huljich Wealth Management managing director Peter Huljich that artificially boosted fund returns.

Huljich and HWM (NZ) Holdings were eventually convicted in the Auckland District on one charge each earlier this year after being prosecuted by the Financial Markets Authority (formerly the Securities Commission).

Judge Brook Gibson fined Huljich $112,500, while the company was fined $239,000 and ordered to pay court costs of 95,000.

The deal has made Fisher Funds one of the largest New Zealand-owned KiwiSaver providers, with more than 100,000 members and more than $400 million in total funds under management.

The consolidation of KiwiSaver providers continued last week when Kiwibank bought Gareth Morgan Investments for an undisclosed sum.  Rumours are swirling in the financial sector as to what price the state-owned bank paid for GMI.

Sam Stubbs, chief executive of default provider Tower Investments, said this week he expected to see further consolidation in the KiwiSaver market in the next couple of years.

"In the first phase people will overpay for the dream [of owning a KiwiSaver scheme]," he said.

"In terms of the economic viability of a scheme as a stand-alone entity - and some providers subsidise their schemes - 50,000 members you would think would be the minimum but it depends on what you are offering."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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