Brook Asset Mgmt shuts up shop
Brook Asset Management is to close completing the collapse which began with the departure of its star fund managers in 2008.
At the time the wealth management firm was flying high with over $1 billion of funds under management, and had a mandate from the NZ Super Fund to invest New Zealand shares for it.
But the 2008 departures of Simon Botherway and Paul Glass dealt it a blow from which it could not recover following its sale earlier that year to Australian investment bank Macquarie.
Following their departure investors pulled their money out, much of it transferring to Devon Funds Management, which was set up by Glass in 2010 after his non-compete contract on the sale of Brook had expired.
Brooks' head of business development Katrina Kruger confirmed the closure but would make no comment.
No attempt will be made to sell the business, with the closure being described as a managed wind-down of the funds.
An amended prospectus for the group's funds, posted with the Companies Office on April 3 reads: "From 3 April 2014 no further offers will be made and no member of the public will be able to subscribe for units in the Funds."
In a statement Macquarie said the decision to wind up Brook followed a strategic review of the company which concluded that "expectations for achieving a business of scale are not possible in the medium term".
It will provide operational support and funding for the business to ensure an orderly wind-up, but could not yet give details of what options KiwiSavers and investors in its other funds will be given.
Macquarie said its other New Zealand businesses, including its wealth management service, would not be affected by the closure of Brook.
Brook operates a KiwiSaver scheme and several funds, but the KiwiSaver scheme has just over $10 million invested in it, making it tiny by contrast to rivals in the same space like Fisher Funds.
It also ran the once-mighty Alpha fund and the Tasman fund, both high-growth, high-conviction share funds focusing on New Zealand and Australian shares.
The five funds it manages outside of the KiwiSaver scheme had a just over $51m in them at the end of March last year, financial statement filed with the Companies Office show.
The Brook Tasman fund saw outflows of $12.5m in the previous 12 months, and the Alpha fund saw $8.6m flow out.
As well as Glass and Botherway, Brook also lost some of its other star names like chief investment officer Mark Brighouse, now with Fisher Funds.
As a result of its shrinking funds Brook ran into the red, losing $1.97m in the year to the end of March 2013, following a loss of $1.32m in the previous year.