You’ve got to love the Kiwi entrepreneurs for just getting on with it, and quietly building billion dollar businesses from the middle of nowhere.
And it seems they have a penchant for financial services businesses. While Rod Drury and his team have built a billion dollar SaaS accounting behemoth in the form of Xero, from Wellington, another Kiwi, Adrian Durham is hot on his heels. And his billion dollar wealth management business just landed what is possibly the biggest fintech transaction of the year.
Canadian pension fund CDPQ and Generation Investment Management (Al Gore’s fund) have jointly acquired a stake in FNZ that values the company at £1.65 billion.
Since 2003, FNZ has acquired a stunning £330 billion in assets under administration. It is the caretaker of 5 million investors, courtesy of its partnerships with the likes of Santander, Lloyds Bank, UBS, Barclays and many more. The platforms reach extends across 60 financial institutions across the globe.
What is remarkable about the business – and possibly speaks to the fast-tracked success, which requires intense focus and energy – is that around 400 employees remain shareholders, and will continue to own about one third of the equity of the company going forward.
The platform has also taken on building out Vanguard’s direct-to-consumer platform, which is a significant coup, and something BlackRock will no doubt be watching closely.
Platforms are a big play, and wealth management is grappling with how to bridge the expensive, advisory driven world and the new digital, millennial driven AI advice space. The majority of platforms are still trying to find ways to accommodate the old model while re-skinning for the new.
The big question is can you do both? My intuition says no – at least not particularly well. Which means there is a huge opportunity for a digital wealth platform that doesn’t have to retro-fit to the old.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.