KiwiSaver obstacle to Tower sell-off

TIM HUNTER
Last updated 05:00 01/02/2013

Relevant offers

Industries

Auckland Council will no longer buy land for parks, will rely on developers to provide them Woolworths Australia tipped to sell Ezibuy as part of restructure Australian parent Woolworths closes six Countdowns House prices could fall 11 per cent by late 2019, as building catches up: Infometrics Woolworths Australia to close dozens of stores, cut 500 jobs McKinsey Global Institute: a different look at income inequality HD version of Freeview's satellite television service on the horizon Wellington student accommodation blocks for sale Ivanka Trump on her 'amazing' father and building her own brand Fraud crackdown gets software upgrade as NZ software company Auror expands in Australia

Listed insurer Tower's role as a default KiwiSaver provider could yet be a complication if the company sells its investment arm.

It is understood three potential buyers are in the frame, but none can acquire Tower's default provider status without approval from the government.

Market sources say the three include a New Zealand consortium involving Fisher Funds and TSB Bank. The other two are said to be a boutique Australian fund manager and a large Australian financial institution.

BusinessDay understands that Tower will entertain bids only for the whole funds management business and will not sell the KiwiSaver operation separately.

Tower has about $4.2 billion of funds under management, of which about $900 million is in the KiwiSaver scheme. According to Morningstar about $460m of that KiwiSaver money is invested in Tower's default fund, one of six funds allocated to savers who don't choose their own fund.

Tower has been going through a strategic review of its businesses and in November announced the sale of its health insurance arm for $103m to Australian insurer Nib Holdings.

Tower shares closed down 3c yesterday at $1.93, valuing the company at $519m.

Ad Feedback

- BusinessDay.co.nz

Special offers

Featured Promotions

Sponsored Content