Fidelity Life has confirmed that it has done a deal to sell its KiwiSaver business to Grosvenor Financial Services which will also see it take an ownership stake in the company.
Under the deal Grosvernor will assume management of the Fidelity KiwiSaver Scheme and will also work with it on other investment related business.
Currently Grosvenor uses Fidelity as its insurance provider.
Terms of the transaction remain confidential. However, as part of the deal, Fidelity Life will take a minority shareholding in Grosvenor.
Once the transaction is complete Grosvenor will manage KiwiSaver assets worth more than $600 million on behalf of nearly 100,000 members.
It will be one of the country’s largest New Zealand-owned and operated KiwiSaver providers – and the seventh largest overall.
“This is about two successful New Zealand owned companies working in a strategic alliance that allows them to focus on what each of them does best,” Grosvenor managing director Allan Yeo says.
“In addition, there is strong synergy between the two companies, both are dedicated and loyal advocates of New Zealand’s thriving independent adviser network.”
“With Grosvenor’s track record and experience in funds management, we believe the combined fund will lead to even more exciting opportunities. We have an unwavering commitment to our advisers and will continue to help members grow their retirement savings through the delivery of effective financial advice,” Yeo says.
“The transaction also puts the combined organisations in a strong position to gain default provider status in the future.”
Fidelity Life chief executive Milton Jennings says the company will continue to work with Grosvenor on investment-related issues while focusing on its core business of providing market-leading risk products.
“This alliance will allow the two companies to share resources – services, products and support – for the benefit of our adviser networks.”
The type, range and costs of funds to existing members will not change as a result of the deal.
A formal agreement between Grosvenor and Fidelity Life is now in place and, subject to usual commercial considerations the transaction is expected to be completed by September 2013.