Tucked away in an unassuming building on Wellington’s Brandon Street is a financial services company worth some $20 billion, despite rarely making the headlines.
This is partly because FNZ Group is technically not a New Zealand business, rather it is a multi-national corporation registered in the Cayman Islands.
The British territory is one of the world’s most famous tax havens and is the nominal home to many financial services companies as it doesn’t impose any direct taxes.
In 2020, there were almost twice as many registered companies in the Caymen Islands as there were people living on them.
But despite this, FNZ has its roots firmly planted in NZ.
The wealth management platform was founded in 2003 by former Jarden equity analyst, Adrian Durham, who saw an opportunity to update financial services for the digital era.
It provides a platform that customers – such as Vanguard, HSBC, Barclays and BNZ – use to offer wealth management to their own clients.
It integrates both customer-facing and behind-the-scenes administrative operations into a single platform that it sells as a subscription.
FNZ also provides cloud computing infrastructure, as well as automated investment and trading tools.
It administers over $1.5 trillion on its platform on behalf of some 650 financial institutions and over 8,000 wealth management firms. Is understood to be profitable.
Big bucks
Last week, the wealth management platform said it had secured US$1.4b (NZ$2.11b) of new equity funding from the Canada Pension Plan (CPP) Investment Board and fintech private equity firm, Motive Partners.
FNZ said it was one of the largest ever raises in the wealth management sector and valued the business at more than US$20b.
The company sold a majority stake to Generation Investment Management and another Canadian pension fund, CDQP, in 2018.
Singaporean investment firm Temasek invested last year to help expand FNZ’s reach into the Asian market.
CPP Investments has contributed the bulk of the latest round, chipping in $1.1b which FNZ plans to use to drive growth in North America – a market it has only recently entered.
Adrian Durham said the company he founded has grown exponentially and now has an annual platform revenue of more than US$1b, having quadrupled in the past three years.
Founder of Motive Partners, Rob Heyvaert, will join the FNZ Group board as a non-executive director.
Shopping spree
FNZ had been on its own acquisition binge prior to this capital raise, buying businesses in NZ, the US, Germany and Switzerland.
It bought Wellington-based retail investment platform Hatch last October, with plans to broaden its range of asset classes, investment styles and expand the offering in other markets.
FNZ also bought Fondsdepot Bank – a business-to-business bank in Germany – and a Swiss customer onboarding software company called Appway.
In 2020, it bought a majority stake in the US wealth management brand State Street which it combined with its own platform to launch a venture in the US.
The company also has a branch in South Africa, where it offers blockchain-based fund trading and settlement services to reduce risk and cost for investors.
FNZ’s acquisition appetite is expected to continue with some of the new capital earmarked for acquisitions, particularly in the US.
It is reportedly interested in portfolio management businesses, ‘turnkey’ asset management platforms, and back-office market infrastructure.
