Most rumours are true, so it was no surprise to see the Gareth Morgan sale tip-off I reported last December come to fruition.
Denied in December, signed off in January, the state-owned KiwiBank is now the proud owner of the $1.5 billion Gareth Morgan investment business after shelling out an alleged (by me) $50 million.
As my previous blog pointed out, there's a certain logic to the deal and both parties should be reasonably happy with the outcome.
KiwiBank gets a massive boost to its investment management business, Gareth Morgan gets more time to help hapless penguins etc.
By default, the deal also means the country at last has a government-owned KiwiSaver scheme - perhaps it should apply to be a default scheme come the systemic review due in 2014.
There are some immediate implications, too, for the existing KiwiBank KiwiSaver scheme, which outsources investment management to AMP Capital. With about 15,000 members and upwards of $60 million under management, the KiwiBank KiwiSaver scheme is likely to give AMP the boot ASAP, bringing everything back to its new in-house investment service.
Some rivals have questioned whether KiwiBank will keep the Gareth Morgan investment administration system, which is unique in the industry. Specifically, Gareth Morgan made a big deal about not doing 'unit pricing', which requires some tricky renaming of things because the KiwiSaver scheme does operate as a pooled portfolio investment entity (PIE) with 'economic interests' still required to be divided equitably between members.
These quirks aside, however, the success of the Gareth Morgan scheme (in attracting members, if not performance) has been one of the stand-out KiwiSaver stories with a suitably patriotic angle.
In his email to scheme members Morgan said: "KiwiBank is an iconic Kiwi business that we can all identify with. I am staunchly in favour of New Zealand-owned businesses doing well in our own market, looking after the interests of fellow Kiwis and continually pursuing excellence of products and service levels that we can all be proud of."
And in a field dominated by Australian parents, it's nice to see the Kiwi kids still competing.