Navigator’s $12 billion life insurance and investment platform, including $1.1 billion in multi-manager product, will be transferred to NAB under an agreement with Aviva

Australia to buy its wealth
management business for $825 million.

The acquisition, which is subject to
regulatory approvals and confirmation from the ACCC, is expected to be earnings
per share and return on equity accretive in the first full year following acquisition,
NAB said in a statement.

Navigator’s wrap platform is made up of 35
per cent superannuation, 37 per cent investment and 28 per cent pension.

It is not yet clear what the future holds
for Aviva’s platform team. Following the acquisition of the business, a
spokesperson said NAB would be moving into a design phase which would last a number
of months.

“All products on sale will remain on sale
for the foreseeable future,” she said.

“The businesses will operate as normal;
there are no plans to do anything drastic in the short term. What happens in
the future will be determined in due course.”

MLC has approximately $55 billion in multi-manager
funds under management via Master Key Custom and Master Key, while Navigator manages
$1.1 billion.

Peter Warnes, head of equity research at
Morningstar, said the acquisition adds scale – all important in a high fixed
cost business – and some new capabilities to the current MLC/NAB wealth
management business, including life insurance, wrap and distribution.

“Overall this looks a good deal with
potential to add value to the wealth management/life insurance operations of
NAB,” he said.

David Smythe, director at Zenith Investment Partners, said at first glance, it appeared to be a “solid tie-up”.

“On face value we think the acquisition is a sound
one and gives them additional scale in the platform space, with the potential for
integration between Navigator and the MLC platform. We also think that it gives them stronger penetration into the IFA
market, which is a positive.”

Warren Chant, principal and co-founder of Chant West, said Navigator’s multi-manager product should fit with MLC quite well. 

“MLC is just increasing market share and
Navigator has been a well known platform for a long time. In principle, it seems
to make a lot of sense,” he said.

The businesses acquired by NAB include
Norwich Union Life, the Navigator investment platform and strategic stakes in
four independent financial advisory firms.

However Aviva Investors (nee Portfolio
Partners) is notable by its absence from the deal. Melbourne-based
Asia-Pacific CEO of the funds manager, Craig Bingham, said Australia’s
institutional superannuation investment market remained strategically
important to Aviva, and the office here would continue to be a
springboard into the burgeoning markets of Asia and the Middle East
(Bingham has just returned from the Middle East where Aviva Investors
has a significant family office client). 

NAB also avoided the potential legal minefield of Aviva’s one-third stake in the Professional Investment Services dealer group, which has had significant exposure to Timbercorp and other failed investments.


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