Huljich Wealth Management (NZ) Ltd

For the brothers Chris, Paul and Michael Huljich, see Huljich brothers.

Huljich Wealth Management (NZ) Ltd was a New Zealand funds management company associated with Peter Huljich and the politicians Don Brash and John Banks. By the time of its sale in 2010 the company had grown the largest privately managed KiwiSaver Scheme (by members) in the country.

History

The three Huljich brothers met John Banks in the 1970s when they frequented his cafe.[1] In 2007, Peter Huljich, son of Chris, with the support of Banks and former National Party leader and Reserve Bank Governor Don Brash set up a "boutique funds management company" in downtown Auckland, partly to manage the Huljich family's extensive investment portfolio.

Operations

The operating company, Huljich Wealth Management (NZ) Ltd, established three KiwiSaver funds. The company targeted "high-net-worth individuals" although smaller investors could "gain access through KiwiSaver or through the balanced fund". John Banks said he, Brash and the Huljichs "would be fairly choosy about who invests with us".[1] In 2009, Huljich Wealth Management was the largest 100% owned New Zealand-owned KiwiSaver provider in the country.[2]

Compensation Payments

In 2010, Peter Huljich admitted responsibility for "lapses" in investment practice when he failed to disclose that he had compensated the company's KiwiSaver funds for poorer than expected returns.[3] He had made two payments of $150,000.[2]) . Rival fund managers Gareth Morgan and Carmel Fisher described Huljich's conduct as "beyond the pale".[3] His role as managing director and chief investment officer was taken over by the company's chairman, Don Brash and Hulich was replaced on the Board of the company by his father, Chris Huljich.[3][4] In taking over Peter Huljich's executive roles, Brash admitted that the business had not been transparent but also pointed out that a number of allegations about the way Huljich KiwiSaver Funds had been managed were unfair and untrue.[2] Brash left the firm and sold his shares in October 2010. John Banks then took over the management role.[5]

Prosecution

In November 2010, the Securities Commission laid criminal charges against Huljich Wealth Management and director Peter Huljich.[6] In December 2011, Peter Huljich and the company (now called HWM NZ Holdings) were convicted. Huljich was fined $112,500 and the company $239,000 (plus $95,000 to be paid to the prosecution (the Crown via the Financial Markets Authority which had replaced the Securities Commission on 1 May 2011) for court costs.[7] Peter Huljich had rejoined HWM's board as the sole director in August 2011.[8]

Sale

In May 2011 Huljich Wealth Management sold its KiwiSaver business, consisting of 87,000 KiwiSaver members with entitlements of $191 million, to Fisher Funds Management Limited for $20.9 million.[9] Chairman John Banks explained that the shareholders had decided to move on from the KiwiSaver business, "recognising that increasing compliance costs and regulation would change the KiwiSaver landscape in future years".[10] The Kiwisaver operation (with 87,000 eligible members with entitlements of $191 million) was sold for $20.9 million. Huljich Wealth Management retained responsibility for debts and payables. The proceeds were reduced by a $4.29 million write-off of fees, "stamp duty" and losses on vehicles sold, leaving a gain on the disposal of the business of $16.53 million. The business made a profit of $13.5 million in the 14 months to 31 May 2011 compared to a loss of $771,737 in the previous year. The accounts for the 14 months to May 31, 2011 filed in the Companies Office showed share capital of $1,000 and retained earnings of $9.6 million.[11]

See also

References

  1. 1 2 Jenni McManus, "Brash and friends bank on Cullen's KiwiSaver", Sunday Star Times, 1 July 2007
  2. 1 2 3 The National Business Review, Rich List, Auckland, 2010, p. 45 (published as an annex to The National Business Review, July 30, 2010.)
  3. 1 2 3 Jenni McManus (12 March 2010). "Huljich fund gives clients exit offer". Dominion Post. Retrieved 23 July 2010.
  4. ↑ Interest.co.nz (4 March 2010). "Peter Huljich resigns, Brash becomes MD". The New Zealand Herald. Retrieved 28 April 2012.
  5. ↑ Tamsyn Parker (19 November 2010). "Huljich faces charges over KiwiSaver". New Zealand Herald. Retrieved 19 November 2010.
  6. ↑ Roeland van den Bergh (18 November 2010). "Huljich faces criminal charges". Dominion Post. Retrieved 18 November 2010.
  7. ↑ Fletcher, Hamish (20 December 2011). "Huljich fined for misleading KiwiSavers". The New Zealand Herald. Retrieved 20 December 2011.
  8. ↑ William Mace, "Huljich cops big fine over 'honest mistake'", The Dominion Post, Wednesday, 21 December 2011, p. B6.
  9. ↑ BusinessDesk (27 January 2012). "Huljich KiwiSaver price revealed - $20.9m". The New Zealand Herald. Retrieved 28 April 2012.
  10. ↑ "Huljich hands fund over to Fisher Funds", The National Business Review, April 1, 2011, p. 1. (retrieved 1 April 2011) Archived April 28, 2012 at the Wayback Machine
  11. ↑ "Huljich Sold Kiwisaver Business For $20.9 Million", Newsroom, 27 Jan 2012. Archived September 23, 2013 at the Wayback Machine
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