The exchange operator says its up to $35 million purchase of the Auckland-based fund manager, which has $1.27 billion under management, will help NZX transform its Smartshares business into the country's leading passive funds manager and provider of exchange traded funds (ETFs).
SuperLife holds sizeable stakes in two of the market's most poorly performing stocks - energy-efficient motor maker Wellington Drive Technologies (19.8 per cent) and power-saving lightbulb maker Energy Mad (19.2 per cent). It also holds 6 per cent of the shares in bladder cancer test developer Pacific Edge.
These aren't passive, index-tracking investments and it's hard to see where they fit in with NZX's aims around the SuperLife acquisition.
Wellington Drive, Energy Mad and Pacific Edge are among the NZX's 10 worst performers this year, having fallen 66.7 per cent, 45.8 per cent and 36 per cent respectively by 1pm yesterday. The first has never reported a profit and regularly tapped shareholders for cash. Energy Mad has missed prospectus forecasts and failed to deliver profits since its 2011 initial public offering, while Pacific Edge has solid growth hopes but got caught up in a global sell-off of tech stocks this year after its shares hit a record high in January.
Funding SuperLife has provided through convertible notes facilities to Energy Mad and preference shares in Wellington Drive could see the fund manager significantly increase its holdings in those firms in the future. Both would be very hard to exit.
Philosophy sticks
An NZX spokeswoman says SuperLife, as with any manager, has a diverse range of investments that meet guidelines for each of its funds and less than 10 per cent of its NZ equity portfolio is in small companies.
"SuperLife's investment philosophy, which has ultimately driven the business' success and the growth of its members, will remain."
She says the acquisition is the catalyst for the creation of a vibrant business in ETFs.
LanzaTech to NZX?
Biofuel developer LanzaTech might have moved most of its New Zealand-based staff to the United States this year, but it's still eyeing the NZX for a potential sharemarket float.
The Chicago-based firm, founded in Auckland in 2005, has raised US$120 million ($153.5 million) in growth capital since March, including US$60 million from the NZ Super Fund this month, and is targeting 2016 for the launch of the first commercial production unit. Its technology uses gas-gobbling microbes to convert industrial waste gases into valuable chemicals such as ethanol.
LanzaTech chief executive Jennifer Holmgren says the company could go public through a dual listing in New Zealand and the US during the second half of 2016, after the launch of the first commercial unit.
Finzsoft rally
Profits and dividends? From an NZX-listed software company? It's all very novel, unfashionable even, but Finzsoft Solutions is having an impressive run.
With just over two weeks to go, the Auckland-based developer of software used by banks and other financial institutions will almost certainly end up being the best performing main board stock for 2014.
Its shares have gained more than 1000 per cent in the year-to-date, rising from 42c on January 3 to close at $5 last night.
On October 1 managing director Andrew Holliday said further work the firm had secured with Australia's St George Bank meant earnings for this financial year were expected to be four times larger than the $754,000 reported for the 12 months to March 31, 2014. That sent the closely held stock - Holliday owns almost 70 per cent - on a mega-rally, rising from $1.40 before the announcement to hit a record $6.40 on December 4.
Last month Finzsoft announced a half-year profit of $2 million for the six months to September 30, against a small loss in the same period a year earlier, and indicated that it expected to "materially exceed" the profit guidance provided in October. Finzsoft said on Monday it would pay an interim dividend of 14c a share.
