“It is a managed fund, but it provides a daily set rate of interest.
“It’s designed to be able to give people the reliability that they expect of a savings account, so we’re really trying to appeal to New Zealand savers rather than investors,” he said.
McLeish estimated that around $200 billion sits in low-interest bank accounts in New Zealand.
“That’s a pretty clear sign to us that people don’t really like managed funds for saving purposes, and that’s just simply because you’ve got a variable return fixed fees.
“What we have tried to do is flip that around and provide people with that stated advertised rate every day, just the same way that a bank’s on-call rate does, and that reliability so that they can have a viable alternative to a bank savings account.”
Wedge would get paid for its services through a performance-based fee.
McLeish said the product is purely cash and fixed interest, targeting AA rated fixed interest investments here and overseas.
He said Wedge would offer a global cash and short-term income portfolio.
“We get what we think is much greater flexibility, liquidity, diversification, and actually a better return from the assets rather than having only invested in New Zealand like New Zealand cash funds do.”
Wedge was confident it would be able to offer better rates than the banks.
“This isn’t recreating the wheel or rocket science or anything particularly complex.
“The only reason that Wedge, can and will thrive, I think, is because the banks pay such terribly low interest rates on savings accounts - that is a big part of how the banks are so profitable in New Zealand.”
The big four banks - which have about 90% of the market - are offering below 1% now on their on-call savings accounts, he noted.
“What we’re going to do is just simply go out into the wholesale cash and fixed income market and deliver to people the interest rate that’s on offer in that wholesale market, and that right now sits at about 4%.
“It’s quite meaningfully higher than what you can get with money in the bank.”
Commenting on last year’s court case, McLeish said it was a “harrowing” time for himself and his family.
“We always knew the truth, and while it took some time to come to light, we’re very thankful that it did, and that we’re able to move on,” he said.
“So, you know, from our perspective, it was a terrible time of our lives that was resolved well over a year ago now,” he said.
“We’re just very thankful that it has been resolved and that we’ve obviously been able to move on and to be able to focus on the future.
“We’ve come out the other side, so we’re very, we’re very happy about that and are keen to move on.”
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
