Grosvenor Financial Services Group will triple the number of its KiwiSaver scheme members and jump up to seventh place on the rankings now that it has bought the management of Fidelity Life's KiwiSaver scheme.
Under the cash and equity deal, Grosvenor will manage $600 million worth of assets for nearly 100,000 members, giving it 5% of the Kiwisaver market.
The terms of the deal are confidential but Fidelity Life will take a minority shareholding in Grosvenor of between 10% and 20%, which will make it Grosvenor's second largest shareholder behind managing director Allan Yeo.
Fidelity Life chief executive Milton Jennings says the deal will enable Fidelity to focus on the insurance side of its operations after buying Tower's life business .
Mr Yeo says the merger of the two schemes is subject to approval by the Financial Markets Authority but if approved it will ensure the long-term viability of Grosvenor's Kiwisaver scheme.
He says he hopes the Government will consider the larger scheme as a default provider when it reviews KiwiSaver next year.