As flagged in the February 2005 issue of Investment and Technology, upstart Kiwi wrap provider First NZ Capital will leapfrog its Australian rivals to become one of the biggest portfolio administration firms in the world following a deal signed with UK insurance and investments giant Standard Life.

First NZ Capital edged out global financial software institution DSTi to win the Standard Life contract. It is also understood a number of Australian wrap providers were considered by Standard Life when it first began a search for a platform almost three years ago. The Standard Life contract, confirmed late in November, gives the Wellington-based First NZ Capital the opportunity to administer a significant portion of the UK firm’s GBP 110 billion (or AU$255 billion) funds under management. UK press reports have indicated the Standard Life wrap will be priced at 60 basis points and while First NZ Capital’s share of that has not been disclosed even the lowest estimate of 2-3 basis points for admin would make the Kiwi company one of the largest IT exporters in the southern hemisphere. First NZ Capital charges between 20-30 basis points for its full planning and administration wrap service to its Australasian clients. The group currently administers over NZ$3 billion of retail and wholesale money. Australian dealer group PIS uses a badged First NZ Capital wrap, dubbed Discovery, in NZ, and is rolling out the product in Australia. Adrian Durham, First NZ Wrap chief executive, told Investment and Technology this February that: “;This business [Standard Life] is 10 times bigger than the entire Australian wrap market.”; “Our expansion into the UK will rapidly position FNZ as one of the largest providers of wrap platforms globally, providing benefits to all our customers,” Durham said in a statement issued last week. According to UK online news service Citywire, however, some British commentators “… feel Standard could face challenges adapting First NZ’s system to the different tax and regulatory rules in the UK”. Durham told Investment and Technology earlier this year that the First NZ Capital wrap had been sufficiently adapted to conquer the convoluted UK tax environment, which he described as even more mixed up than Australia. “;They seem to change the tax laws every two years there… there’s about 15 different tax regimes we had to cater for,”; he said at the time. Standard Life will release its new wrap early in 2006. First NZ Capital has 25 people working full-time on the wrap in Standard Life’s home-town of Edinburgh and will expand its staff to 40 by next year.

Leave a comment