KiwiSaver provider Kiwi Wealth is up for sale. Photo / file
The sale of Kiwi Wealth is understood to be progressing, with final indicative bids due by mid-July.
Fisher Funds and Booster are said to be leading the pack, although Jarden, PEP and possibly a fifth contender are still in the mix.
However, Fisher and Booster are expected to make higher offers for the KiwiSaver business as there are more synergies with their own KiwiSaver operations.
Kiwi Wealth is owned by Kiwi Group Holdings, which is itself owned by NZ Post, the NZ Superannuation Fund and ACC, ultimately making it state-owned.
The business is a highly contested asset because it is the fifth largest provider in the market and those sorts of opportunities don't come up often.
Another factor said to make Kiwi Wealth highly attractive is that it is seen as being significantly over-staffed, with more than 220 employees.
Stock Takes understands that is part of what makes it hard for other bidders to compete against Fisher or Booster, because they could look at collapsing the entire structure of Kiwi Wealth into their existing businesses.
The possibility of Fisher buying Kiwi Wealth has raised eyebrows, with some people noting that Fisher lost its default fund status last year because of high fees.
Allowing it to essentially buy back default provider status could set a dangerous precedent.
However, there seems to be no concern on this front from the Government side.
Asked specifically if the Government would veto the sale of a default provider to a provider not judged to fit the criteria for default status a year earlier, Commerce Minister David Clark declined to comment.
Asked if there would be any conditions imposed on a new owner to ensure fees were not increased, given the Government's focus on bringing down KiwiSaver fees, Clark said: "Default fund providers are subject to the terms and conditions of their instrument of appointment, which include limits on and reviews of fees, minimum service standards and member engagement requirements."
One factor weighing against the sale price will be current market volatility, which will have pulled down the earnings of the business and could affect the ability of any party to raise debt against buying Kiwi Wealth.
The sale could be finalised as soon as August, though settlement could take some time.
The call from the Shareholders' Association and KiwiSaver provider Simplicity for the chair of Fletcher Building to resign over the Gib board crisis has raised eyebrows among some institutional investors.
While the Gib supply issue has attracted plenty of media attention and is far from ideal when the country is trying to catch up on years of housing under-supply, Fletcher is far from the only company to be caught out by the rebounding economy and a supply shortage.
About two years ago when Covid hit, New Zealand was staring down the barrel of potentially huge job losses and a possible recession.
But billions of dollars pumped into the economy through cheap cash and government subsidies produced a boom instead. Few could have predicted that.
The boom has resulted in a whole range of businesses running out of goods to sell - try buying whiteware, getting some car parts, finding bicycles or getting a tradesperson to come and do a quick job.
One market player said it was unfair to pick on one company and call for its chair and board to resign.
"To turn around and pick one industry and go 'well, this board should resign over this' I just think is nutty - I don't think it is a call that can be justified at all.
"Underestimating the extent of a boom during a Covid pandemic - I'm not calling for boards to resign on that otherwise every board I can think of has got to go.
"If we shoot directors like this, then who wants to step up and be on a public board when you are being asked to resign for things out of your control?"
Simplicity's involvement could also be seen as ironic, given that three months ago it was pinged for misleading KiwiSaver advertising by the Financial Markets Authority.
Chief executive Sam Stubbs was out of the country when the law breach was announced and didn't have anything more to say about it when contacted by the Herald.
He didn't resign over it and nor did Simplicity's board. Fletcher Building hasn't broken any laws, but is being lambasted for running out of supply.
Bitcoin's tumble to under US$20,000 last week has prompted some market commentators to predict that the cryptocurrency will eventually be worth nothing.
Microsoft founder and billionaire Bill Gates weighed in, saying that both cryptocurrencies and NFTs - non-fungible tokens - rely on the greater fool theory where investors make money on worthless or overvalued assets as long as other people are willing to bid more for them.
Last year cryptocurrency exchanges spent billions on advertising and expansion but now many are laying off staff.
Janine Grainger, chief executive of Kiwi crypto exchange Easy Crypto, says it remains in a good position despite the sharp fall in digital currencies and won't be laying off staff.
"We recently raised capital so we have got capital to see us through this period," said Grainger.
She said that like other markets, crypto had its bull and bear cycles.
"This is not just crypto, you see this with tech more generally, in the bull market there is so much going on there is a lot of potentially not sustainable projects being funded and propped up by a bull market and then when you enter a bear period it is actually a really good time for the fundamentals and the real core product innovation and product build so that's what we will be focusing on in the next year or so."
Grainger said people had predicted bitcoin's death more times than could be counted.
"Everyone has got a different view on this.
"The big macro view when I look at it is, I cannot see a world in which financial services and products do not go digital. We are increasingly digitising our lives and it's just a no-brainer that these products will move away from paper-backed systems, from analog systems, centralised systems into more of a digital approach because it is hugely increased efficiency, transparency, all of those things that the digital currencies offer."
Whether that means bitcoin will be around in 10 or 20 or 30 years, she says, is impossible to predict.
"That's not the same as saying I don't believe cryptocurrencies will die but individual projects may or may not. Personally, I think bitcoin is likely to stick around.
"It has got that track record, has been around for over a decade now and has not been hacked."
She said typically the first mover or first innovator in an industry wasn't the winner.
"Facebook wasn't the first social media platform, Google wasn't the first search engine. Often it is the second or third mover that has the advantage because they can take what was there and innovate on it. But bitcoin is a bit unusual in that it does seem to be that first mover - it has lasted 10 years and my view is that it is going to be around long-term but there are different opinions on that of course."
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