Sam Stubbs

 

 

 

Introduced by Allan Sam Stubbs spoke to us about Simplicty, its inception, around a kitchen table, the economy and the housing market.

 

Previously Sam was CEO Of Tower Investments, a KiwiSaver default provider. Before that he was Managing Director of Hanover Group, and spent 10 years working for Goldman Sachs in London and Hong Kong. He previously worked for Natwest Markets, Fay, Richwhite and IBM New Zealand.

He has been a Board Member of the Financial Services Council, and a member of the Government Taskforce on Financial Services.

 

He is now Managing Director of Simplicty.

 

Sam told us of his upbringing in Sunnyvale, New Lynn and how it set him up for his future.  He lived in an area where while is parents were teachers and better off than most, most of his neighbours were "working poor" in that the pay packet paid the rent or mortgage, kept people clothed and fed and that was it.  Getting ahead was hard. 

 

Sam told us of the creation of Simplicty around a kitchen table in Devonport. The aim was to provide a simple low-cost financial provider to the New Zealand community and be a disruptor in the financial services and residential sector.

 

Sam has an optimistic view of NZ's future and told us he thinks the next 30 years will be the best in NZ history. 

 

Going forward Sam commented that we are used to two things in New Zealand in financial terms- Money comes and goes which leads to a number 8 wire mentality as we make do with what have got and the way to get ahead or make money is through property gains. This has meant that the average price of homes has ramped up so they are now very expensive. This means home ownership has dropped from 82% of New Zealanders in 1979 to 62% now which means now 38% don't own a home which in turn means renting is becoming prevalent.

From Sams perpective Kiwi saver is the good news.  It is allowing for the agregation of capital throught the savings Kiwisaver has created which in turn flows on development of infrastructure and similar.  Kiwisaver now holds about  $121 billion dollares having started at zero 14 or so years ago. Kiwisaver funds coupled with $60 Billion in government superannuation and 40 billion in ACC means from Sams perspective there is significant funds $240 billion available for development through infrastructure.

 

Simplicty was started 9 years ago.  The intention was to make a difference for other New Zealanders by setting up a plan focussed on low cost and keeping things simple.  Simplicity is owned by the Simplicitiy foundation which in turn makes charitable donations to worthy NZ Charities.  15% of all fees generated by Simplicty are paid to the foundation. Ownership by the foundation imposes an obligation on the investment arm to think act and invest for the long term.

 

As well as Kiwisaver Simplicty has extended its activities to Build to Rent under a company called Simplictity Living which has built developments in Mt Albert, Glen Innes and has developments under construction or in the pipeline at Mt Wellington, Ellerslie and Morninside. Sam commented that Auckland has a housing crisis in that there is a shortage of 1-2 bedroom apartments as there are many who do not need 3 or 4 bedroom homes as children leave home, or because of their personal situations.

 

Simplicity is aiming for that market.  Simplicity is building its developments using concrete and brick with the intention that those developments last beyond the 50 years prescribed in the Building Code.  It is also keeping maintenance and management in-house to ensure that the developments it has created remain tidy and in good order.

 

Sam was thanked by John Meadowcroft.