Cameron Partners chases buy-side role for Fisher Funds stake
Kiwi investment bank Cameron Partners may have missed out on the sell-side mandate to oversee TA Associates’ divestment of its chunky stake in the $NZ100 million-a-year Fisher Funds. But its bankers are hell-bent on getting a piece of the action.
Street Talk can reveal Cameron Partners has been approaching prospective bidders with a flyer of its own in hopes of securing a buy-side advisory role. As reported, Macquarie Capital is mandated to run a sale process for TA’s 34 per cent stake.
Cameron Partners is in front of prospective acquirers of TA Associates’ stake in Fisher Funds with a persuasive argument. Erin Jonasson
The version knocked together by Cameron Partners, and obtained by this column, says Fisher Funds is expected to make $NZ200 million ($186.8 million) in management fees alone (excluding performance fees) and circa $NZ100 million EBITDA this financial year. That’s nearly triple the $NZ70 million total revenue recorded in the 2017 financial year.
Of course, working on the sell side typically means a guaranteed paycheck. But scoring an advisory mandate for the winning bidder comes a close second as far as fees go.
To this end, Cameron Partners has emphasised its impressive deal credentials in the sector and far-reaching network. It has a “strong relationship” with Simon Power, who started as Fisher Funds’ CEO just last month, the document said.
And it advised Kiwi Wealth – since bought by Fisher Funds – on its valuation and strategy in 2021. The following year, Cameron Partners tended to Accident Compensation Corporation on the sale of its stake in Kiwi Bank to the New Zealand government.
With about $NZ20 billion in funds under management and more than 500,000 clients, Cameron Partners claims Fisher Funds is a “highly regarded brand” and a way to gain exposure to New Zealand’s growing population and assets in KiwiSaver, the government introduced voluntary superannuation savings scheme.
Cameron Partners also spruiks Fisher Funds’ annuity-style revenue stream, low customer churn, low capex requirements and “excellent profitability” which has seen the company run at EBITDA margins greater than 50 per cent. Finally, it points out Fisher Funds’ strong track record in growing FUM organically and via acquisitions.
Toi story
That’s all standard stuff and presumably not much different from MacCap’s sell-side pitch. But the Cameron Partners’ document offered some insight – and a potential solution – around managing Fisher Funds’ philanthropic-minded part owner Toi Foundation, whose presence is expected to be a turn-off for some suitors.
“Toi Foundation is a long-term shareholder that distributes dividends received for charitable purposes in Taranaki, New Zealand. It currently intends to hold its Fisher Funds stake indefinitely,” the flyer said.
“Potential purchasers will need to be comfortable owning a minority stake alongside Toi Foundation which may reduce the relative competitiveness of the process. Control arrangements could, however, be managed through an appropriate shareholders agreement,” it said.
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