Globally, financial markets have faced a tough time since March. However, a contrasting theme is also emerging in the financial services sector in New Zealand. M&A is active particularly with overseas buyers finding value and sustainable yield from well established businesses.
Fintech innovators have continued to bring new products to market, and we have seen the increasing importance of taking environmental, social and governance (ESG) factors into account when making business and investment decisions, is pushing its way to the forefront, in New Zealand with the introduction of mandatory climate-related financial disclosures fast approaching, Sustainable finance has also become a very hot topic, attracting the interest of many financial institutions and market participants.
M&A activity in New Zealand’s financial services sector expected to remain strong
We anticipate the current M&A surge in the financial services sector will continue in New Zealand. With global equity markets likely to remain volatile, overseas investors (particularly from Asia and the United States) are actively seeking the stability and predictability of return from solid New Zealand financial services businesses.
Listed below is a sample of financial services sector activity in the last 12 months that MinterEllisonRuddWatts has acted on.
Dai-ichi Life’s acquisition of Partners Life
In August 2022, Tokyo-listed global insurer, Dai-ichi Life, entered into an agreement to purchase New Zealand life insurer, Partners Life. The transaction will result in Dai-ichi Life acquiring 100% of Partners Group Holding Limited, the parent company of Partners Life Limited.
MinterEllisonRuddWatts, MinterEllison and Baker McKenzie (Japan), advised Dai-ichi Life on the acquisition, which values Partners Life at just under NZD1 billion and sees the New Zealand business gain access to significant capital and global industry expertise to assist its continued growth objectives.
Blackstone’s investment in Resolution Life
In October 2022, Blackstone Partners announced one of its funds had agreed to invest in and undertake investment management for Resolution Life Insurance, whose assets include is the closed books of AMP Life in Australia and New Zealand, as well as books in the United States and elsewhere.
MinterEllisonRuddWatts was engaged by Blackstone’s lawyers Willkie Farr & Gallagher LLP to advise on New Zealand aspects of the transaction, with Clyde &Co advising in Australia. The transaction will involve an investment of USD 500 million.
Macquarie Group’s acquisition of AMP Capital’s Global Equities and Fixed Income business
In March 2022, Macquarie announced Macquarie Asset Management (MAM) has reached financial close on the acquisition of AMP Capital’s Global Equities and Fixed Income business, and the transfer of approximately AUD47 billion of assets under management from AMP to MAM.
MinterEllisonRuddWatts was engaged by Macquarie to advise on New Zealand aspects of the transaction.
ASB Group Investments sale of its management rights in Superannuation Master Trust
In February 2022, ASB Bank’s fund manager subsidiary ASB Group Investments completed the sale to NZX’s subsidiary, Smartshares Limited of the management rights of the ASB Superannuation Master Trust, confirming settlement of the transaction within the timeframe announced in November 2021. The transaction involved NZD1.8 billion in retirement savings from more than 17,500 members across more than 100 employer groups,
MinterEllisonRuddWatts acted for ASB Group Investments.
Bidders for KiwiWealth
MinterEllisonRuddWatts acted for several bidders for fund manager KiwiWeath Limited, in a protracted process throughout 2022. In August 2022 state-owned Kiwi Group Holdings announced the sale for NZD310 million, to Fisher Funds (represented by another firm.
Debut crypto investment platform
FinTech start-up, Debut, has a goal to help people save and grow their money using decentralised finance technology. Debut has developed an application which assists users to invest money into one of three options (each option is based on different targeted annual growth rates and minimum deposits) and earn yield from coins and tokens held by Debut for the user.
MinterEllisonRuddWatts’ work included client terms, regulatory advice and liaison with the FMA.
GD1 crypto fund
GD1 established a New Zealand venture capital fund which plans to invest in traditional venture capital, as well as digital assets and blockchain based investment opportunities. This is a continuation of the trend where venture capital investment is pouring into digital assets and blockchain based investments.
MinterEllisonRuddWatts advised on the fund’s establishment.
Dimensional Fund Advisors retail fund
Dimensional Fund Advisors established its first retail fund in New Zealand in June 2022. Managed by Implemented Investment Solutions, the retail fund invests in overseas funds managed by Dimensional Fund Advisors.
MinterEllisonRuddWatts advised Dimensional on its New Zealand obligations including financial services regulation, AML, tax, sanctions and privacy.
Futureverse is developing its own digital token which, once created, will be used in an open metaverse environment and power a number of Web3 businesses. Projects such as this are indicative of the growing opportunities in the Web3 space.
MinterEllisonRuddWatts advised Futureverse on how this token might be regulated under New Zealand financial services regulation.
With a reputation for stability and strong investment growth, we do not see the level of international investment in New Zealand’s financial services sector slowing in the short term.
To discuss the financial services sector regulatory environment or investor trends, please contact one of our team below.
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