KiwiSaver obstacle to Tower sell-off

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

Relevant offers

National business

Tower Insurance chairman Michael Stiassny expresses frustration at claims holdouts Productivity Commission reveals future ways councils will tax homeowners Australian mining boss Gina Rinehart turns to netballers to cut costs at Roy Hill mine Bay of Plenty booms, while Taranaki's economy plunges Xero finds machine-learning from the cloud will be trickier than expected Rain and cooler temperatures delay sauvignon grape harvest in Marlborough The fog that caused chaos for hundreds of travellers at Wellington Airport Diversity is good for business says woman who lives outside her comfort zones West Coast native forests could be harvested under Grey District Council proposal Ceres Organics workers strike for better working conditions

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