Anthony Edmonds is a fund guy.
With a professional lineage tracing back to Southpac in the early 1990s, and AMP Capital Investors for more than a decade, Edmonds has spent his entire career in the industry.
Along the way he has racked up a hard-won knowledge of the inner-workings of a business that – despite new disclosure regulations – can still seem opaque to outsiders.
As well as an appreciation of the nuances of investment management, Edmonds has absorbed a detailed understanding of the funds manufacturing and distribution machinery right down to the nuts-and-bolts of product legal structures.
Indeed, as his many industry colleagues know too well, he can talk at length on the relative tax merits, for example, of NZ-based portfolio investment entity (PIE) funds compared to Australian-domiciled unit trusts.
But that combination of streetwise industry experience and a deep detailed product knowledge has served Edmonds perfectly in the creation of the online managed funds service, InvestNow.
“To build a platform like InvestNow, you really have to understand how the links in the managed funds chain fit together,” he says. “Managed funds are simple conceptually – they’re just a way to pool many investors together under a professional investment strategy. But in practice, funds can be notoriously complex to administer, and that’s before you even factor in new regulatory layers such as anti-money laundering laws.”
Over the course of many years the managed funds industry has eased many of its back-office headaches with technological analgesics. In the process specialist businesses such as custodians, third-party fund administrators, trustees and investment ‘platforms’ (sometimes known as wrap accounts) have evolved as technology-heavy entities.
“Most of the fund technological developments, though, have been very internally-focused – solving industry business problems rather than designed for the end investor,” Edmonds says. “But almost from the first time I saw the internet, I recognised the online world would offer an ideal way for the fund managers to connect directly with investors.”
His dream of creating a direct-to-consumer online fund portal, however, would remain a fantasy for almost two decades; stymied for a long time by technological constraints and a perceived lack of demand.
Both those roadblocks have been removed in the last few years, Edmonds says.
“There’s been two key developments in the NZ managed funds space this century: both happened in 2007 for related reasons,” he says. “Firstly, the government authorised a new class of NZ-domiciled managed fund – the tax-effective PIE regime – coupled with the launch of KiwiSaver.”
At the time, the NZ retail managed funds industry was languishing at under $20 billion: almost exactly 10 years since the PIE revolution and the figure has quadrupled with about $40 billion in KiwiSaver and $35 billion in other retail managed funds.
“KiwiSaver and PIE have introduced managed funds to just about every New Zealander over the age of 18, and quite a few under,” Edmonds says. “That’s created a generation of savers who are comfortable with the concept of funds. We recognise that many of these investors will want to seek advice on where to place their funds.
“But there’s also a new cohort of investors confident enough to make their own fund choices and expect to be able to do that online. And now, we actually have the technology to fulfill that demand.”
Dreams, though, require teams to realise their potential. And InvestNow is no one-man band. Over the two-year development period for InvestNow, Edmonds has assembled a crack team of experts specialising in areas such as marketing, technology, product, custody and legal, including:
Mike Heath, previously head of RaboDirect New Zealand, has been helping drive InvestNow’s growth; and,
Custody expert, Hugh Stevens, also joined Edmonds’ team, after returning from a global role within French behemoth BNP Paribas.
Steve Rivers and Andrew Brockway are long time colleagues of Anthony’s, having worked together at AMP Capital Investors for more than a decade.
Just months after launching, InvestNow has already jumped to more than $50 million under management, surprising even the ever-optimistic Edmonds.
“I’ve been overwhelmed by the take-up – and from a really diverse bunch of clients,” he says. “It’s pleasing to see that New Zealanders are accessing funds with the freedom that every investor should enjoy.”