CDPQ and Temasek cash in on FNZ's uncommercial capital raises, leaving employee shareholders out in the cold
LONDON, June 5, 2025 /CNW/ -- Warrants issued as part of three successive FIAT transactions by global wealth management platform FNZ – raising approximately US$1.5 billion in new capital – have now been exercised by two of the institutional investors.
As part of the uncommercial terms of these equity raises, FNZ's board and management issued US$1.2 billion worth of Redeemable Preference Shares alongside a bundle of 27,625 Warrants.
Now, CDPQ and Temasek have exercised their Warrants, crystalising the significant dilution for employee shareholders.
These Warrants enabled FNZ's institutional and private equity investors, who control the board and management, to acquire FNZ Class A shares at US$0.25 per share. This is a staggering discount compared to a potential market price of US$130,000 per share. Based on FNZ's most recent publicly available enterprise valuation of US$20 billion, the fair market cost of these shares should have been US$3.6 billion, not US$7,000.
Now that CDPQ and Temasek have exercised their Warrants, they have secured 19,361 new Class A shares, representing over 70% of the total Warrants issued.
Employee shareholders point to this deal as a glaring example of "non-arm's-length transactions", favouring the institutional shareholders represented by the board at the expense of employee shareholders.
"This is daylight robbery and it is clear that the likes of CPP, Generation and Motive will now follow suit," said one senior FNZ employee shareholder, speaking on condition of anonymity.
"Our institutional and PE investors each handed themselves a package worth billions, and in doing so have obliterated the value of the shares held by employee and former employee shareholders, who built the company."
FNZ's management and board have significantly diluted employee shareholders. In addition to the Warrants, the Redeemable Preference Shares were structured with extremely high return hurdles, providing a two or three times Multiple of Invested Capital (MOIC) for redemption.
The FNZ board has failed to engage with employee shareholders regarding their concerns. FNZ employee shareholders are now bringing their case to the High Court of New Zealand in what will be one of Asia Pacific's largest class actions of its kind.
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