Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Link expands in NZ with Aon admin purchase
Link Market Services confirmed last week it would buy the Aon NZ superannuation admin business in a move first mooted in early July. Stan Malcolm, Link’s NZ head of operations, said the private equity-owned registry business was on track to absorb Aon’s staff and client base in the next few months.
“Once we’ve executed [the Aon purchase] we should transition the clients and around 40 staff [to Link] before the end of the year,” Malcolm said. “We’ve been planning to enter the NZ fund admin business for quite a long time and Aon presented a great opportunity for us to do that.”
According to the Aon NZ website, the group “administers 60 schemes including 22 KiwiSaver Schemes, 9 Complying Superannuation Funds and 14 Defined Benefit Schemes”. However, it is understood the Aon-owned master trust and KiwiSaver scheme – which collectively manage between NZ$350-400 million and remain under Aon ownership – represent the group’s largest admin client.
The number of both KiwiSaver and employer super schemes has declined in recent years with more expected to close under coming regulatory changes and increased competitive pressure.
Malcolm said the Aon-administered superannuation and KiwiSaver funds would be switched to a system built by a Link subsidiary and based on a version used by its Australian arm – where the company is “the biggest fund administrator”.
“We have a bespoke platform built for New Zealand, adapted for KiwiSaver,” he said. “We’re unencumbered with baggage [compared to competitors] and this is a natural extension of what we do already in other registry markets.”
Mercer and Trustees Executors would be Link’s main competitors in the NZ super fund/KiwiSaver admin space but Malcolm said a number of funds also operate in-house systems.
“The industry needs to think about what their core business is,” he said, “and if there is an opportunity to outsource.”
Malcolm said Link was in talks with a number of other parties in NZ.
In a statement released last week, Aon admitted it was talking to Sydney-based Link “in relation to its scheme administration services”.
However, in a newsletter sent to its KiwiSaver members last week, Aon said it was changing administrator.
“There will be no change to the scheme itself and it will continue as the Aon KiwiSaver Scheme with the same investment options,” the newsletter says. “The change we are planning is to outsource the administration services for the scheme. We are making this change to take advantage of better technology and provide improved services for our members. “… The actual timing of the transition is still being decided and we will let you know further details at a later date.”
The NZX sold down its 50 per cent share in Link for $13.8 million in June.
– David Chaplin, Investment News NZ
