NAB announces $NZ700m NZ wealth merger with Jarden, PEP

NAB says the merger creates the opportunity to grow the BNZ KiwiSaver Scheme by expanding product offerings. Picture: NCA NewsWire / John Gass

National Australia Bank and Jarden Wealth and Asset Management have announced plans to merge their wealth advice and asset management operations in New Zealand, with Pacific Equity Partners to be an owner.

The move was first reported by DataRoom on October 30.

It is understood that the deal values the new entity at about $NZ700m including debt, with PEP injecting about NZ$245m into the business to obtain 35 per cent, with the funds to be roughtly split between Jarden and NAB.

NAB’s JBWere New Zealand and BNZ Investment Services businesses will be combined together with Jarden Wealth and its Harbour Asset Management, capitalising on the growing demand for financial services from high net worth investors, superannuation funds and non-for-profit groups.

Under the proposed transaction, NAB and Jarden Wealth will each receive not only a cash payment but a retained shareholding of 45 per cent and 20 per cent respectively.

The new entity will be called FirstCape.

The transaction will create a leading wealth management business in New Zealand with a combined 113 advisers, $NZ29bn ($27bn) of funds under advice and administration and $NZ15bn of funds under management, including $NZ5bn of KiwiSaver funds under management.

NAB says the merger creates the opportunity to grow the BNZ KiwiSaver Scheme by expanding product offerings, leveraging Harbour’s asset management capability and BNZ’s distribution network.

It also creates operational efficiencies through scale, supported by simplification of processes and systems.

“This is an exciting opportunity to grow the JBWere New Zealand advisory business and provide JBWere New Zealand advisers a wide range of advice tools to continue to offer a high-quality advice proposition to our clients,” said JBWere New Zealand chief executive Craig Patrick.

The new entity will be led by Malcolm Jackson, currently chief executive of Jarden’s Wealth and Asset Management business.

NAB Executive Private Wealth and chief executive JBWere, Michael Saadie, said NAB was committed to continuing to grow its JBWere business in Australia, which he said was a critical part of NAB’s integrated High Net Worth offering.

The proposed transaction would not have a material impact on NAB’s cash earnings, NAB said.

On completion, NAB would recognise a gain on sale within statutory net profit.

Subject to finalising the accounting treatment, the gain was expected to be excluded from cash earnings.

Upon completion, the proposed transaction was not expected to result in a material impact on Level 2 Core Equity Tier 1 capital.

The proposal is subject to regulatory approvals and is expected to be completed by June.

It comes after Jarden earlier considered a spin off of its wealth unit to merge with FNZ should it have been successful in buying Kiwi Wealth that sold last year for $NZ310m, to TA Associates.

TA Associates has flagged plans to sell wealth management operation Fisher Funds in New Zealand through Goldman Sachs, which may pave the way for a further deal by FirstCape further down the track.