Stewart seeks more capital to fund growth

Ralph Stewart’s Retirement Income Group is looking to raise up to $2 million in new capital to help grow the business which includes working with KiwiSaver providers and running a new super fund for UK pension transfers.

Monday, August 8th 2016, 8:20AM

The money raised will be used as working capital to help the company reach a break-even point which is forecast to be in early 2018.

Retirement Income Group has also changed its capital holding policy. “We have increased our policy of holding at least 100% of the required regulatory capital to 110%.

It has made this change as a key part of the company’s variable annuity product offering is around its “trust and confidence positioning.”

RIG is on target with its sales but is seeing new opportunities in KiwiSaver and with superannuation plans.

Currently just over half of its $5.2 million in sales have come from financial advisers and the balance from direct sales.

It started doing retail sales presentations in Kapiti and has now done them in other areas including Tauranga. These sessions have generated significant sales leads, the company says.

RIG says it has 100 AFAs licensed to sell its product, however the lead time in closing sales has been longer than expected.

It is taking around 120 days for sales to close and that is partly due to funds being in term deposits and an unwillingness to break these investments early.

RIG say “wholesale progress is encouraging” and it working with two KiwiSaver providers. One of these aims for a market launch next year.

The company is forecasting KiwiSaver will provide $75 million in sales in 2017 and this will rise in the following years. By 2020 it is forecasting to have $330 million from its white labelled KiwiSaver product.

RIG says it has been approached to manage a new superannuation fund that targets pension transfers.

The Garrison Bridge Retirement Fund is forecast to deliver $5 million in sales this year and $30 million next year.

RIG’s offer seeks a minimum of $1.38 million and a maximum of $2.06 million. It is being done on a first in, first served basis and the share price is $1.20 each. This is a 20c increase on the earlier issue price reflecting a revised valuation of the business.

Tags: KiwiSaver Ralph Stewart Retirement Income Group