Employee Shareholders Call For Action After Losing US$4.5 Billion In Equity: Global Financial Services Company In Crisis

9 April 2025 

Employee shareholders of FNZ, a global leader in financial services with over US$1.7 trillion in managed assets, are speaking out after three capital raises in just 12 months have diluted their shareholder equity by over US$4.5 billion.

FNZ was founded in New Zealand in 2003 and now employs over 6,000 people around the world, has 24 million end users and provides its wealth management services platform to some of the world’s largest financial institutions.

Ownership of FNZ is between employees (present and past) and leading institutional shareholders including CDPQ, CPP, Temasek and Al Gore’s Generation Investment Management. Employee shareholders are the second-largest shareholder group, holding close to 35 percent of shares, the value of which has been drastically eroded by institutional investors, who dominate the Group Board and control senior management through recent appointments.

In 2024, the FNZ Board raised US$1bn by issuing two rounds of preference shares to the existing institutional shareholders many Board directors represent. It then awarded these same institutional shareholders warrants. These preference shares rank higher than employee shares and therefore these actions diluted employee shareholders by over US$3bn.

On April 5th 2025, the company raised an additional US$500 million using the same type of preference share structure, potentially increasing the hurdle valuation from US$6.8 billion to US$8.3 billion for employee shareholders (another $1.5 billion dilution). The potential effect of these actions is to wipe out entirely the share value of shareholders that built the company over 20 years, with that value transferred to current institutional shareholders.

An external spokesperson for FNZ B class shareholders expressed frustration at the lack of substantive responses from FNZ’s board and management to their concerns. "The board has not only failed to adequately address the points raised in formal communications and legal letters, but has taken steps to further magnify the very issue in question by approving the third capital raise of US$500m only last Saturday," they said.

Employee shareholders have been the backbone of the company for more than two decades, helping establish the company as a world leading financial services company, and like so many successful growth companies employee participation in equity is a cornerstone of their remuneration.

“The institutional investors and the private equity firms, who dominate FNZ’s board and stand to benefit from preferential share issuances, are prioritising their own returns with these decisions. This has not only undermined the hard work and dedication of employee shareholders but also put them at risk of destroying all their equity that for some represents their entire retirement savings,” the spokesperson said.

With the company domiciled in New Zealand, the affected shareholders are deeply concerned about potential violations of the New Zealand Companies Act 1993, including unfairly prejudicial conduct and improper exercises of directorial powers. They believe these actions highlight significant conflicts of interest within FNZ’s Board and management across 2024 and 2025.

It would appear that employee shareholders have no choice but to take legal action which we understand to be imminent.

"We cannot stand by and allow what we consider to be an unjust wealth transfer from us ordinary employees who built FNZ to institutional investors, including some of the world’s largest sovereign wealth funds and private equity firms."

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