Financial services technology firm FNZ ‘on brink of big deal’ as director joins

By ERIKKA ASKELAND
Published on 18/11/2012 00:00

FNZ, the fast-growing financial services technology firm, has signed a new non-executive director and is set to land a “major deal” with a new client in the coming weeks, its chief executive Paul McMahon has said.

The Edinburgh-headquartered company, which now employs close to 300 staff, is thought to be in talks with insurance giant Aviva to supply its “wrap platform” technology.

Trevor Matthews, the chief executive of Aviva UK, has been a champion of the technology outfit since he signed a deal with it while he was head of the Standard Life UK business. The £35 million deal was so significant for FNZ it prompted the then New Zealand-based company to relocate its headquarters within Scotland in 2005.

McMahon, who joined the company six weeks ago after a surprise departure earlier in the year from life and pensions group Aegon, declined to confirm talks with Aviva. But he said that new legislation coming into force for financial services companies in the UK was the “most significant” that had hit the industry in the veteran insurance executive’s lifetime.

McMahon said the company, whose platform also acts as a custodian, has funds under management of £30 billion, and that the collective value of the UK savings market – once changes to the sector ushered in by the retail distribution review and auto-enrolment kick in – will be worth “trillions”.

“This is genuinely a more significant shift in terms of some of the changes in the industry that I have ever seen.

“We have a very healthy pipeline of business in the UK and Europe, as well as some interesting activity in South-east Asia. We have 16 customers globally, eight or nine significant ones in the UK. The opportunity has barely started.”

Last year, the company grew its profits more than five-fold, to £20.7m from £3.8m in 2010, mainly on the back of winning business with the likes of Axa, Friends Life, JP Morgan, Standard Life and Zurich. McMahon said the company – whose ultimate parent, HIG Europe-FNZ, is based in the Cayman Islands – has a “complicated structure” and the profit figure also reflects licence fees.

Meanwhile, turnover grew to £56m – £20m more than its expected target.

Last year, the company attracted investment from private equity firm General Atlantic. They joined fellow investor HIG who had bought a majority stake in the firm from a consortium of 60 New Zealand-based angel investors in 2009.

FNZ has also appointed Graeme Hardie as a non- executive director. The banker, who was a key player in the takeover of NatWest by Royal Bank of Scotland, is also a non-exec for challenger brand, Metrobank.