The New Zealand business, founded by Malcolm, managing director Marcelle Ashcroft and operations manager Lynn Wilson, saw the opportunities for growth when MUFG took full ownership of its parent company Link Group last May in an A$1.2 billion ($1.3b) scheme of arrangement.
Sydney-based Link Group was delisted from the ASX exchange and the New Zealand and Australian business was renamed MUFG Pension & Market Services, with access to trusted global expertise and resources.
Tokyo-based MUFG, which has a history dating back more than 360 years, is one of the world’s largest and most diversified financial services groups with more than US$3.3 trillion ($5.6t) in assets.
The New Zealand and Australian businesses have two branded operating divisions:
● MUFG Corporate Markets, the unit that operates registry services for equity and debt products (listed and unlisted) including exchange traded funds (ETFs).
● MUFG Retirement Solutions, operating retirement (superannuation) and fund administration services, including registry and fund accounting for KiwiSaver schemes, wholesale and retail managed funds, master trusts, employer workplace savings schemes and unit trusts.
In the past year, MPMS NZ has signed up fund managers such as Mercer, Lifetime Retirement Income, Resolution Life and Australian ETF provider Betashares, which has entered the New Zealand market with a range of wholesale funds.
MPMS NZ now manages six KiwiSaver schemes – Lifetime, Medical Assurance Society, NZ Funds, Kernel, InvestNow, and the latest addition – Evidential.
MPMS NZ’s staff numbers increased from 85 to 90 and in February, it celebrated 20 years in business with a function for 140 guests at the Maritime Museum in Auckland.
Ashcroft says “across the office, our people can speak 26 different languages. Every culture brings good things to the working environment – we have lots of different cultural celebrations".
“We have a work-from-the-office culture and having our team in the same space creates great collaboration, ideas, efficiency and a shared sense of purpose.”
Malcolm says “it’s been 20 years of amazing challenges”.
“It was just the three of us and no clients in 2005. Over the period, we have brought 36 new products, services and technology to the market that weren’t there when we started. We try to release something new every year.”
MPMS NZ quickly replaced paper and reduced the costs of mailing with electronic communications such as email and PDFs. It developed investor portals and was the first to take the management of all capital raisings online.
It created an intuitive virtual meeting platform (the first in Australasia) for shareholders to watch a special or annual meeting, vote online, ask questions and participate just as they would in a physical meeting.
The innovation continues.
“We adapted our virtual meeting platform to cater for results calls and investor briefings. Clients (and non-clients) are able to walk into our office and sit down in a studio environment for a podcast-style webcast,” Ashcroft says.
MPMS NZ has been developing application programming interfaces (APIs) to share data with its clients.
Malcolm says the API picks up the data when it is told to send – this increases efficiency and reduces risk. “We are aiming to have the process of receiving fund manager instructions fully automated over the next six months. We have more than 200 API end points available for fund managers to access their data.
“The fund manager likes to own the customer experience and engage with investors on a regular basis. We can provide transactional data which the fund manager uses to extract performance and other trends.
“With data security an imperative, it’s prohibitive to send investor data by email. APIs and portals make life much easier.”
MPMS NZ is enhancing its ShareMeUp app so that investors who are already recorded on its register can invest as little as $50 per trade in shares and exchange-traded funds (ETFs).
“We aggregate the orders and place them through a broker. We have a relationship with a large broker and can transact on behalf of the investor in a low-cost manner.
“We look at it as a service rather than a revenue opportunity. We came up with the idea more than 10 years ago and we now have the headspace to do more with it.”
Malcolm says the ShareMeUp upgrade will be completed by September, and it will involve a wallet functionality, making it a more scalable application.
He doesn’t see ShareMeUp as direct competition to Sharesies.
“They buy shares that go into a custody arrangement. Our application is targeted at shareholders who currently hold their shares directly on register,” Malcolm says.
“Some people want to increase their holdings but they want to do it bit by bit because they may not have a lot of money, or they may not even have a broker.”
MPMS NZ manages the register for 214 issuers, including 103 of the 178 listed stocks and 62 of the 155 listed debt securities.
It has a 58% share of the listed equity and ETF market and looks after six of the top 10 issuers, including leading stocks Fisher and Paykel Healthcare, Infratil, Auckland International Airport, Contact Energy, Spark and Ryman Healthcare.
Its biggest register is Entrust, which owns 75.1% of Vector, with more than 350,000 power consumers.
Malcolm says the debt capital market has become another source for growth, especially the issuance of bonds and notes by local councils which have large infrastructure needs.
“Since the Official Cash Rate came off its high of 5.5% in July last year, we have noticed a large increase in borrowing at the council level. Their need for capital is greater than ever. Our total debt book has doubled from $300 billion to $600 billion in just three years,” he says. “We believe a lot of debt capital will be sought over the next six to nine months. There is an ongoing requirement for corporates and organisations to have strong balance sheets and be well capitalised in uncertain times.
“You don’t know what will hit the market next. But we all have a business to run and we need to keep going and stay calm.”
The MPMS NZ Corporate Markets division handled the three largest capital raisings in New Zealand over the past 12 months – Infratil’s $1.15b, Auckland International Airport’s $1.4b and Ryman Healthcare’s $1b.
Ashcroft says: “We have developed a strong, sustainable business with solid growth over the last 20 years and for us, it’s still growth when looking at the next 20 years.
“We need to look for more sandpits to play in – for instance, we’d like to grow our share of the KiwiSaver market and with Trustees Executors and BNP Paribas exiting the market, there are opportunities there.
“Our growth has been organic and if there is anything we come across acquisition-wise, and it makes sense, then we will look at it from a growth perspective. But we are trading on our integrity and trust and we don’t want to get it wrong.”
Ashcroft says the new Japanese owners have not changed the way that the business operates. “There are stronger risk and compliance requirements due to MUFG being a bank, but we have always been strong in that area.”
She says the New Zealand office recently had the highest staff satisfaction score within MUFG Pension & Market Services group, and New Zealand is a great place to be.
● MUFG is an advertising sponsor of the Herald‘s Capital Markets and Investment report.
