[Weekly wrap] Back from the beach

The deal, announced on Wednesday, seems like a good fit given the state-owned bank was looking to dramatically increase the size of its recently-launched KiwiSaver scheme and its fledgling wealth management business in general.

And with $1.5 billion under management including $650 million in its KiwiSaver scheme, GMI had reached a point at which several independent New Zealand fund managers had plateaued in the past.  And like KiwiBank, GMI has pushed its New Zealand-owned pedigree (can we now say it's been nationalised?).

However, the deal has some interesting wrinkles including the fact KiwiBank will continue to run its KiwiSaver business and operate the Gareth Morgan scheme separately (at least for now). Morgan and fellow GMI principal Andrew Gawith will also be kept on to beef up KiwiBank's investment management team.

The purchase of GMI also exposes KiwiBank's underdeveloped adviser force, particularly with regards to AFAs.  Addressing this will take some time, unless it can buy its way into a ready-made distribution network.  Let the rumours begin!