Software group buyout secures Edinburgh jobs

FNZ was bought by private equity outfit HIG Europe and the software firm's existing management team.

A consortium of 60 "angel" investors in New Zealand sold the software house for an undisclosed sum.

As well as its 120 staff in Edinburgh, FNZ has a further 100 employees spread across bases in London, Bristol and Wellington, in New Zealand.

The company, whose software administers more than 5 billion of retail assets, was formed within First New Zealand Capital, an investment bank, in 2003 and moved to Edinburgh in 2005.

HIG Europe is an affiliate of HIG Capital, a private equity firm that specialises in the small and mid cap market. Since 1993, HIG Capital has bought some 200 businesses and now has more than 5bn (4.7bn) of equity capital under its management.

Matthias Allgaier, managing director of HIG Europe, told The Scotsman: "We are extremely excited about this opportunity and think we can create a market leader in several countries.

"We think FNZ has the best technology in its market and we want to properly capitalise the company so we can grow it even more than it has in the past.

"We want to make sure management is properly incentivised to build a market-leading company."

As well as Axa and Standard Life, FNZ carries out work for JP Morgan and ING. Allgaier said: "We fully expect more names of similar quality to appear on the customer list."

He said FNZ's turnover was in excess of 20 million and confirmed the company's head office would stay in Edinburgh.

FNZ's existing management team put a "significant" amount of their own money into the business, Allgaier added.

Adrian Durham, FNZ's chief executive, said: "In 2009, we're recruiting 34 positions, most of them in Edinburgh. These are high-value, highly-educated staff that we're looking for, at decent salaries.

"The markets that we're expanding into are Australia and southern Asia, and Europe."

He also quashed reports that had circulated in December, suggesting Standard Life and Axa had bid to buy the firm.

HIG Europe said only 60bn of consumer assets in the UK are currently administered on software-based platforms, while total UK consumer assets are forecast to reach 3 trillion by 2010, "indicating considerable potential for growth".

The firm added: "Significant opportunities exist with pension accounts, which are only just starting to make their way on to platforms."

Standard Life and Axa welcomed the acquisition, with both describing FNZ as having a "important role" in their wealth management arms.