A Chat With Kernel CEO Dean Anderson Episode 85

Kernel is an investment manager, we run a growing range of index funds and we also have a full online investing platform that users can log into, create an account and invest with. We also work across the spectrum, with financial advisers right through to Iwi, charities, and first time investors. We just want to build great products that deliver better long term wealth for Kiwis.

When we got setup, we said, let’s build something today that actually uses fresh technology that’s digital first. Financial services, as you know is dominated by institutions running on old technologies that don’t care about the customer. The reality is they’re running pretty old processes, and so the idea was, if you start with a clean sheet of paper, you could build something that was far smarter, a far better experience and actually designed to give a better outcome for the customer.

We’re still pretty young and there’s a lot still to be done but last year we were the fastest growing investment manager in New Zealand. We want to continue on that momentum and extend the product range and provide good products, good outcomes and good relationships with customers.

I originally studied finance and initially worked in the energy space after graduating, it was after that job that I started working at the NZ Stock Exchange. I got involved in a number of areas, one of them being funds management. The NZX had its own funds management business and I was involved in launching and building index funds which really got me into the world of long term investing and sparked my passion about what you could do in that space.

It was a really interesting experience, so I spent 6 and a half to 7 years there, which in the context of the Stock Exchange was quite a long time, there was a couple of CEOs and a bit of turnover, it was a really fast paced world. It really reinforced for me that I wanted to set up a business that genuinely put the customer first in the decision making process.

It’s really common with any organisation to have consultants come in or others who emphasise conversations around how to cut costs or how to maximise profits. Very few conversations seems to be had that are in the interest of the end user and customer.

The leap was really interesting, I left the NZX in 2018. There was no intention to leave, I had a good relationship with a manager there, he had bought a business which he had stepped out of as well. I handed in my notice with no plan of where I was going or what I was going to do. I kind of felt like I’ve done my time here, I wanted to see what happens next.

I was doing a bit of contracting and then thought, bugger it, actually we can do this smarter, if i’m ever going to do it, now is the time.

Looking back on it, I think it’s important for anybody at some point in their life to just take a leap of faith moment and follow a passion. I know that’s not possible for everybody but bringing it back to investing, that’s one of the benefits of why you should invest. it gives you some security and freedom of choice when it comes to situations like this.

Reality is, I had a broad range of investments that set me up for Kernel, property did very well, I bought at a very fortunate moment, I was in my early 20’s and we effectively bought a house with $20,000, over 5 – 6 years, that grew in value. Obviously Kernel is my core asset now, everything I do is in Kernel. Outside of that, just regular investing into boring old index funds.

I actually haven’t had any real speculative investments but on the flip side, there are also times you wish you held onto certain assets. I once bought a 1950’s land rover for $1,800 and sold it for for $4,500. Now it’s worth around $50,000.