Jarden, a leading investment banking and advisory firm in New Zealand, has announced a major restructuring of its wealth management and advice business. The firm will spin off its wealth management arm into a separate entity called FirstCape, in partnership with National Australia Bank (NAB) and Pacific Equity Partners (PEP).
Why the split?
According to Malcolm Jackson, the first chief executive of FirstCape, the decision to separate the wealth management business from the investment banking activities was driven by the changing dynamics of the industry.
“Going back decades, wealth or the broking would’ve been the distribution for the investment bank” but now “almost a dis-synergy” has developed, Jackson told GoodReturns.
He said that from a regulatory and operational perspective, it was more effective to have them running separately. He also noted that the wealth management business had grown significantly in recent years, and required more focus and investment to meet the needs of its clients.
What is FirstCape?
FirstCape is a new entity that will combine Jarden and NAB’s wealth advice and management businesses, including JB Were’s New Zealand operations and BNZ’s KiwiSaver scheme, as well as Harbour Asset Management, a leading fund manager in New Zealand.
The new entity will have $29 billion in funds under advice and administration and another $15 billion of funds under management. It will employ 113 advisers and serve a diverse range of clients, from ultra high-net worth individuals to retail investors.
Jarden will retain a 20% stake in FirstCape, while NAB will own 45%. The remaining 35% will be sold to PEP, a private equity firm with extensive experience in the financial services sector.
What are the benefits?
Jackson said that the creation of FirstCape would bring several benefits to the clients, staff, and shareholders of the involved parties.
For the clients, he said that FirstCape would offer a comprehensive and tailored wealth management service, with access to a wide range of products and solutions, including Jarden’s investment banking capabilities.
For the staff, he said that FirstCape would provide a supportive and collaborative culture, with opportunities for career development and growth. He also said that FirstCape would retain the existing brands and teams of the different businesses, and leverage their expertise and reputation.
For the shareholders, he said that FirstCape would deliver attractive returns and growth prospects, as well as diversify the revenue streams and risk profiles of Jarden and NAB.
What are the challenges?
Jackson acknowledged that the formation of FirstCape would also pose some challenges, such as obtaining the necessary regulatory approvals, integrating the different systems and processes, and managing the transition and communication with the stakeholders.
He said that the parties were working closely together to address these issues, and expected to complete the deal in the first half of 2024. He also said that the parties had a shared vision and values, and were committed to making FirstCape a success.
“We are very excited about the opportunity to create a new player in the wealth management industry, with a strong heritage, a talented team, and a client-centric approach,” he said.
