What's going on at the New Zealand Stock Exchange with its acquisition of managed fund research house FundSource?
The deal shatters any perception that NZX is just a stock exchange which managers a market for trading shares. This deal has taken it further and further into the realm of being a financial services company - like so many others out there.
After all it does already have its own investment products in the Smartshares range of index funds.
What's even more interesting is that the deal puts it into some very different market spaces, including finance companies, credit cards as well as managed funds.
While the NZX acquisition was a surprise, the fact that FundSource was being sold wasn't.
Its owner, David van Schaardenburg, was no longer involved in the day-to-day running of the business, rather focusing on his role as a principal at NZ Funds. The business had been built up to good size and maybe it was time for a new owner.
The deal also does one other thing (I assume) and that is it ends what has been somwhat of an archilles heel for the business.
Many people in the industry had been critical that FundSource was too close to NZ Funds and commercially-sensitive information they may provide to the researcher could end up getting into the hands of a competitor.
There was no evidence this had happened, rather it was a perception which was often raised in the past by various people.
NZ Funds may indeed be one of the losers in the deal as it appeared that FundSource was a training ground for many of its staff. There seemed to be a long procession of people who worked at the research house then ended up at NZ Funds.
While the NZX move is somewhat surprising it is not unprecedented and also illustrates how much change is happening in this reseach space.
On the first of these points Morningstar, FundSource's competitor, bought an Australian sharemarket research company earlier this year, which is sort of like the reverse of what NZX has done.
As reported in Good Returns there is plenty of other changes happening in the research area with new players coming in (PIR), others returning (Rapid Ratings under licence), and insurance researchers Plantech and Boss being sold.
Who is next?
What's going on at the New Zealand Stock Exchange with its acquisition of managed fund research house FundSource?