Grosvenor sets sights on NZ and KiwiSaver

Grosvenor Financial Services looks to exit Australia, become a default KiwiSaver manager and do some more deals in New Zealand.

Monday, November 11th 2013, 7:10AM

The company, last week, made a takeover offer to acquire all the shares in its listed Australian business Tranzact.

Tranzact is 60% owned by Grosvenor and has two businesses; the Camelot advisory business in New Zealand and an Australian master trust business. Earlier this year it sold its SMSF administration business to an AMP-owned firm.

The offer at A12c a share is a premium on the recent price shares have traded at and will cost Grosvenor around A$5.5 million Australian if it acquires full control.

Grosvenor managing director Allan Yeo says Tranzact isn’t big enough to get anywhere in the Australian market, and now there are more opportunities in New Zealand.

He said Grosvenor would like to do another three deals like the one it did earlier this year when it bought Fidelity’s KiwiSaver business.

The sort of deals he is interested in doing are ones where there is a good alignment of values.

These are seen in the Fidelity deal where it was a New Zealand-owned business, a business that used advisers for distribution and a business that is good at what it does.

He says to be successful in markets companies have to have critical mass. Grosvenor couldn’t achieve that in Australia, but in New Zealand it is now a significant player in the KiwiSaver space.

KiwiSaver is at the heart of the Grosvenor business and provides embedded growth of 20% each year.

Yeo says there are lots of opportunities in New Zealand and Grosvenor intends to apply to be a default KiwiSaver fund. The logic behind this is not so much the flow of funds which comes with the status but brand awareness which will help advisers sell Grosvenor to their clients.

When new default providers are appointed they will have to provide education to its members. Yeo says Grosvenor is one of the best in the market at providing educational material.

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