Is Kiwi Wealth for sale?

Market speculation high that SOE Kiwi Group Holdings is about to sell $9 bln Kiwi Wealth, after selling Kiwi Insurance, and Hatch. It is an enterprise that has swelled 7x since it was first purchased as Gareth Morgan Investments in 2012

Investing / news

17th Jan 22, 10:17am by David Chaston

There is market speculation that Kiwi Wealth is about to be flogged off by Kiwi Group Holdings. Kiwi Group Holdings also owns Kiwibank and has started selling off parts of its portfolio of trading financial companies..

Kiwi Group Holdings is owned by NZ Post, the NZ Superannuation Fund, and ACC. It is chaired by Paula Rebstock. Essentially, it is a Government-owned SOE.

Kiwi Wealth is a major KiwiSaver fund manager, and is a default option.

At this stage, a possible sale of Kiwi Wealth is only speculation.

Kiwi Wealth started out in life as Gareth Morgan Investments (GMI). Kiwi Group Holdings purchased it for $50 mln in 2012 when it had $1.2 bln in funds under management.

Kiwi Wealth now has $9 bln in funds under management.

When asked to comment, Kiwi Group Holdings said: "While KGH assesses the performance and strategic fit of its assets from time to time, there’s nothing to announce about any assets." If it is being shopped around, there is likely to be intense interest by many potential buyers.

Last November Kiwi Group Holdings sold Kiwi Insurance to health insurer nib NZ for $45 million in a deal set to complete sometime before the end of March 2022.

Kiwi Wealth sold its US share-broking platform, Hatch, to FNZ in October 2021.

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10 Comments

by Squishy | 17th Jan 22, 10:36am 1642368975

Why'd they want to concentrate just as their other business lines are entering a rough patch with mortgage lending slowing? That'd make no sense strategically.

by Tom Joad | 17th Jan 22, 10:53am 1642370034

Possibly strengthening their capital position for rough times ahead?

by Squishy | 17th Jan 22, 11:21am 1642371688

Selling your winners and holding your losers is like cutting the flowers and watering the weeds. - Peter Lynch

by linklater01 | 18th Jan 22, 9:12am 1642450369

Squishy,

As i was starting in the investment business almost 50 years ago, I got the best advice I have ever had; Professional investors run their winners and sell their losers, amateurs do the opposite.

Sometimes it's been really hard advice to follow but it has stood me in good stead.

by Squishy | 18th Jan 22, 10:09am 1642453743

Doesn't actually work statistically unfortunately.

by CWBW | 17th Jan 22, 12:02pm 1642374126

Perhaps Kiwi Wealth is a non performing (unprofitable) business for KGH.

With so much government intervention, I'm not surprised that managing Kiwisaver funds is becoming riskier than profitable.

Not really worth it if you're after bigger money- someone else can have it.

by KH | 17th Jan 22, 12:51pm 1642377108

Ownership must stay in New Zealand

by nigelh | 17th Jan 22, 1:05pm 1642377939

Labour is National light so they'll be quite amenable in selling the family silver to overseas interests.

by Contrarian | 17th Jan 22, 4:59pm 1642391987

Why not list it in the New Zealand market here ? Give a chance to Kiwis to own a successful finance firm.

by Brutus Iscariot | 18th Jan 22, 2:17pm 1642468623

Makes sense. A wealth manager is a total non-core business for government to be involved in.