NZX sign Photo: RNZ / Angus Dreaver
Stock exchange operator NZX has announced an agreement to snap up fund management company QuayStreet from Craigs Investment Partners in a deal worth $31.3 million.
The deal will be completed through its Smartshares subsidiary, and made up of a $22.5m cash payment and the issuance of $8.75m of NZX shares at a 10 percent premium to last close on 21 November.
The acquisition includes QuayStreet's $1.6 billion in funds under management.
NZX chief executive Mark Peterson said the deal provided an opportunity for it to acquire a high-growth fund.
"Smartshares is a proven funds management business which offers funds to investors that track the performance of an index or use a systematic approach to investing," Peterson said.
"Under Smartshares ownership, there will be no immediate change for QuayStreet clients. The QuayStreet funds will be offered as a premium product set and will complement Smartshares' existing systematic and passively managed product offering."
The acquisition was expected to have a full year operating earnings contribution of between $3.3m and $3.6m in the 2023 financial year, the statement said. Over the next three years if net flow targets are met, it could potentially pay up to $18.75m to Craigs.
Craigs Investment Partners chief executive Simon Tong said it was a mutually beneficial agreement.
"The deal is also strategically important for Craigs, positioning us for growth as we strive to deliver best in class, personalised wealth management through our 180 qualified investment advisers," he said.
"We are working closely with Smartshares to ensure the transition is seamless and that there is no impact to the service and advice our clients expect and deserve."
NZX expected Craigs to transition the management of the QuayStreet funds to Smartshares in late February 2023.
Support services would be transitioned over the following two years.
NZX planned to retain the majority of QuayStreet staff.