NEWS

The NZX took many in the industry by surprise after announcing plans to acquire QuayStreet Asset Management, and more acquisitions can be expected.

The surprise to many was that a passive manager was buying an active manager.

Smartshares says there will be “no immediate change for QuayStreet clients.”

It says the QuayStreet funds will be offered as “a premium product set, complementing Smartshares' existing systematic and passively managed product offering.”

NZX chief executive Mark Peterson says the acquisition of QuayStreet provides an attractive opportunity for NZX to acquire a high-growth fund – aligned with a powerful private wealth network, driving further scale for Smartshares.

“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 says

In addition to the deal, NZX has entered into a product support and distribution agreement with Craigs under which NZX and Craigs will work together to develop new products for the benefit of Craigs and QuayStreet customers. In time, NZX also expects to realise further synergies across the Smartshares business as a result of this transaction.

The transaction will see Craigs transition the management of the QuayStreet funds to Smartshares. It is expected to occur in late February 2023 with support services to be transitioned over the subsequent twoyear period. NZX intends to retain the majority of QuayStreet staff as part of the transaction to continue to support QuayStreet and its clients.

Under the deal Craigs Investment Partners is incentivised to continue to direct funds under management to QuayStreet for an additional three years following the acquisition, with an earnout clause capped at $19 million. It says this would equate to another $1.2 billion of funds under management.

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