Investment platform Kernel Wealth aims to reach $6 billion in funds under management by 2028 after ticking over $1 billion

New Zealand investing platform Kernel Wealth has reached $1 billion in funds under management in under five years and has plans to grow to $6 billion in assets by 2028.

Chief Executive Dean Anderson said Kernel Wealth’s funds under management (FUM) grew by 89% 2023 and have increased over 50% in 2024 so far.

Reaching $1 billion this month was “in line” with what the platform had forecast.

“When we set up the business, we very much understood the sector, understood the space, the time it takes to sort of build trust and credibility,” Anderson said.

“I think the highlight is it was something like 800 days for the first $250 million, but 78 days for the last $250 million, which shows that acceleration, growth and compounding.”

He told interest.co.nz that while the $6 billion goal for 2028 sounded large, it represented just over a 1% market share in KiwiSaver.

“I would almost be disappointed if we just had 1% because I look at this and go, there are a lot of people paying too much for poor value solutions in New Zealand. There are a lot of asset managers that have just been offshoring or merging and sort of not aligned to customer interests,” he said.

“I think we've got an opportunity to have a real impact and 1% to me is a very conservative assumption about what we should be able to do.”

Currently, wholesale clients like financial advice firms, family offices, and not-for-profits make up about 52% of Kernel Wealth’s funds under management. 

It’s a big shift from when wholesale clients accounted for nearly 80% of the funds in Kernel's first year of business.

“There’s a lot of features that we're building from a platform level that just makes it easier and more automated for people to manage and grow their wealth. And obviously open banking is going to be a really great addition in supporting that, albeit how and when that eventually plays out, we'll see,” Anderson said. 

He added that more and more customers were setting up an auto investment plan.

“Which I think shows that Kiwis are trusting Kernel to actually build their wealth, putting more and more of their household wealth on our platform.”

He said New Zealand was currently experiencing a “two-speed economy”.

While many are finding it hard to afford living expenses and mortgages, Kernel Wealth has seen a trend of those with disposable income seeking new ways to grow wealth beyond just investing in property.

“Our median age is sort of late thirties. We’ve got a lot of working professionals who maybe bought that home but don’t want to buy investment property. So how else do they build their wealth?”

Surprisingly chaotic

Kernel Wealth started with three employees, a few million dollars under management and three NZ equity funds in late 2019 – six months before the pandemic.

Anderson said he founded Kernel Wealth after working within the index investing space at the NZX and Smartshares.

“I thought there was an opportunity here to build something that was better aligned to where the trends were, which was consumers increasingly looking for a brand and a technology led experience and a provider that is acting in their best interest,” he said. 

“With a clean sheet of paper we thought, well, actually, how would you design this from the ground up? We very much had this focus on democratising outcomes – it's not about democratising access.” 

The platform has since grown to 24 employees, over 20,000 customers and the aforementioned $1 billion in funds under management.

It also offers 17 index-tracking funds, four actively managed fixed interest funds, two diversified funds, on-call savings accounts and the Kernel KiwiSaver Plan.

Anderson described it as a “surprisingly chaotic” few years.

“As with anybody starting a business, you're battling headwinds. The momentum is there and now we sort of zoom out and try and look at what the next 10 years looks like.”