Date: 18th January 2012
Economist and commentator Gareth Morgan has sold his funds management company Gareth Morgan Investments to Kiwibank.
The announcement was made in Wellington a short time ago.
Morgan says he will remain a director of the company which runs Gareth Morgan KiwiSaver, and a key member of the investment strategy team.
Gareth Morgan Investments was established by Morgan and fellow economist Andrew Gawith. It manages NZ$1.5 billion, making it one of New Zealand’s largest fund managers.
Gareth Morgan KiwiSaver Scheme has total funds under management of $646 million and 57,004 members as at December 2011.
Kiwibank would not disclose the purchase price but said GMI would run as a stand alone operation and become its wealth management division.
Morgan said he initiated the sales process having grown weary of a company which had grown to have 50 staff. ”I don’t want top run 50 people _ I can handle 10,” he said.
He referred to the divesting of that responsibility as getting a monkey off his back.
Kiwibank is to retain the GMI brand and Morgan will focus on his ”passion in this space _ investment portfolio management”.
”The backing by Kiwibank ensures that the business has a strong and credible succession plan,” Morgan said. ”In short, it will be business as usual.”
Kiwibank said both Morgan and Gawith will remain directors of GMI alongside two Kiwibank-appointed directors.
Kiwibank chief executive Paul Brock described the purchase as a unique opportunity for the bank to rapidly grow its Wealth and KiwiSaver businesses.
”We started our own KiwiSaver scheme just over a year ago and while the growth has been impressive we were aware of the need to extend our investment management capability. Our plan to do this looked very much like what GMI has developed,” Brock said.
Kiwibank was launched in 2002 and has about 800,000 customers. Kiwibank launched its KiwiSaver scheme in 2010 and currently has 15,000 customers.
Posted on Stuff.co.nz 18/01/2012