NZ Super Fund Accepts Crown Offer for KGHL-Kiwibank Shareholding
Posted on 08/21/2022
The Guardians of New Zealand Superannuation Fund, the Crown entity that manages the NZ Super Fund, confirmed it will accept the Crown’s NZ$ 527 million offer for its 25% shareholding in Kiwi Group Holdings Ltd (KGHL), which owns Kiwibank and New Zealand Home Loans. Kiwi Group Holdings is owned by New Zealand Post (which holds a 53% stake), the Guardians of the New Zealand Superannuation Fund (25%), and the Accident Compensation Corporation (22%).
Essentially, the New Zealand government will take direct ownership of Kiwibank in a deal valuing the lender at NZ$ 2.1 billion. NZ Super Fund had wanted to buy NZ Post’s majority stake in Kiwibank, but couldn’t get government agreement for the ability to introduce private capital and governance.
NZ Super Fund Chief Executive Matt Whineray said the Crown’s offer presented a fair and attractive opportunity for NZ Super Fund to realize its six-year investment in the company. The transaction is subject to regulatory approval by the Reserve Bank of New Zealand.
“Kiwibank has performed well during the time we have been a shareholder and we believe our involvement played a crucial part in kickstarting that growth. Kiwibank is in good shape, has excellent leadership and strong prospects for the future,” says Matt Whineray in a press release.
Whineray says as the NZ Super Fund matures it will continue to sell as well as buy investments in New Zealand, in line with its independent commercial mandate.
The NZ Super Fund purchased its stake in KGHL from NZ Post in 2016 for $263 million and invested a further $61.75 million in 2017. The investment has earned the Fund a return of more than 10 percent per annum. The NZ Super Fund has more than $8 billion invested in New Zealand, with substantial exposures to technology, financial services, healthcare, land and housing development, timber, rural land, listed equities and both small and large privately-owned companies.
Kiwi Wealth
On another note, Kiwi Group Holdings Limited (KGHL) agreed to the sale of Kiwi Wealth to Fisher Funds for NZ$ 310 million. Kiwi Wealth offers a KiwiSaver scheme, a Superannuation scheme and a Private Portfolio Service for high net worth investors. Originally called Gareth Morgan Investments, Kiwi Wealth was founded by economists Gareth Morgan and Andrew Gawith in August 2000. KGHL bought the business in 2012.
New Zealand Home Loans was founded in Hamilton in November 1996 by John Erkkila and Murray Ferguson. In 2006, Kiwi Group bought a 51% stake in NZHL, gradually increasing its shareholding until it owned 100% of the company by July 2012. NZHL employees are not employed under Kiwibank and the company is run as a separate entity.
