Australian private equity investor Mercury Capital to take stake in NZ broker Forsyth Barr

Australia's Mercury Capital is seeking a strategic stake in Forsyth Barr. Photo / NZME

The shake-up in the New Zealand investment sector looks set to continue with investment firm Forsyth Barr announcing Australia’s Mercury Capital plans to take a strategic stake in the company.

Forsyth Barr said it had entered an agreement with the Sydney-based private equity firm, which is offering to acquire a 25-30% shareholding in the company for an undisclosed sum.

The offer is subject to shareholder approval and other conditions, with completion expected during August, Forsyth Barr said.

Founded in 2010, Mercury specialises in providing growth capital to established businesses across Australia and New Zealand, managing more than $2 billion in funds.

“Mercury Capital’s investment reflects confidence in our strategy, market position and future growth,” Forsyth Barr chairman David Kirk said.

Forsyth Barr was founded in Dunedin 90 years ago and has a long-standing tradition of staff ownership.

The firm today is owned by over 300 staff members.

This proposed partnership was described by the board as a “natural next step” in the company’s evolution.

Forsyth Barr’s managing director, Neil Paviour-Smith, welcomed Mercury’s move.

“We believe their expertise and experience will support the capabilities we have built up as a firm over a long period of time,” he said.

Forsyth Barr provides investment and wealth management services including portfolio management, investment advice, sharebroking, research, investment banking, cash management, investment funds, digital investing and KiwiSaver.

The company has 25 offices across New Zealand, employing over 600 people and managing or advising on over $32b of clients’ investments.

Today’s announcement follows news in June that Shaw and Partners, which is 100% owned by Swiss Bank EFG, bought 75% of ISG, the company behind Devon Funds Management, for $67.5 million.

ISG is an Auckland-based investment firm with more than $7b in assets under management across its wealth management, funds management, and investment platform divisions.

In 2023, Forsyth Barr bought boutique firm Hobson Wealth Partners from its staff and Australia’s Macquarie Group for an undisclosed price.

Jamie Gray is an Auckland-based journalist, covering the financial markets, the primary sector and energy. He joined the Herald in 2011.