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Fisher Funds doubles full-year profit, earns performance fees

Friday 4th October 2013

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Fisher Funds Management more than doubled its profit last year as a strong performance and inflows for most of its funds allowed the privately owned firm to lift management fees and earn performance fees.

Profit rose to $3.6 million in the year ended March 31, from about $1.77 million a year earlier, according to the Auckland-based firm's annual report.

Income jumped 39 percent to $18.8 million as management fees rose 18 percent to $13 million and performance fees jumped to about $3.3 million from just $375,000 a year earlier. The 2013 results are the last before Fisher's transformational acquisition of Tower Investments this year, which lifted funds under management (FUM) to about $5.5 billion from $1.44 billion at March 31.

In the 2013 financial year FUM climbed about 18 percent as the company added clients and lifted returns across all its funds. Fisher's Premium NZ and NZ Growth funds both returned about 28 percent, while its Premium Australian and Australian Growth funds returned 18 percent and 17 percent respectively, according to FundSource data.

"Some funds achieved exceptional performance and beat their benchmarks and high water marks, and therefore earned performance fees, while others didn't," said managing director Carmel Fisher. "While it is our aspiration to achieve performance fees each year, in reality we would only expect to earn them once every few years because it is, after all, a reward for exceptional performance."

Income growth outpaced a 25 percent rise in expenses last year, of which employee benefits were the biggest component, rising 37 percent to $6.2 million.

"We have been hiring, but also employee benefits include remuneration and incentive plans which are based on individual key performance indicators," Fisher said.

The firm paid $79 million for Tower Investments in a deal backed by new shareholder TSB Bank, following the acquisition of the KiwiSaver portfolios of First NZ Capital, Huljich Wealth Management and the New Zealand Association of Credit Unions over the past three years.

The latest deal, which was completed on April 2, made Fisher the largest New Zealand owned and managed KiwiSaver provider with 269,000 customers at the time.

Carmel Fisher said her firm is "on track with its transition plan. We continue to attract new clients, so we think we have a pretty competitive offering."

Fisher Funds is 32 percent owned by Carmel and Hugh Fisher, while TSB bank owns 26 percent and Woodward Funds Management has about 18 percent.

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