Tower hints at further growth
Tower shareholders gave the go ahead to a split of the group into an investment and insurance company and an Australian Wealth management company.
Tuesday, January 25th 2005, 11:22PM
by Rob Hosking
The new company, Australian Wealth Management, will list on the Australian Stock Exchange on February 15 and includes the Bridges subsidiary, with its 134 financial advisers servicing more than 43,000 clients.
AWM chief executive Andrew Barnes, told the special meeting of shareholders in Wellington that the newly independent company will target the self-managed superannuation sector, building on the existing base of APRA regulated small superannuation funds.
“The small superannuation fund market is a rapidly growing sector of the Australian superannuation industry, with 2,500 funds being opened each month.”
In the New Zealand market, chief executive Keith Taylor was less specific, although he promised organic growth and a continuing focus on “that portion of the total financial services market that is not dominated by bank owned distribution. “
Competition in this segment of the market is more fragmented with opportunities for organisations such as Tower to assume a leadership position.”
Taylor also signaled further, though unspecified, acquisitions by Tower, and alliances.
The move is a good one for shareholders, says ASB Securities analyst Stephen Wright.
“I think it will increase the shareholder value. There is some talk that what is left of the Tower business is not all that exciting, but at least it is a focused business, and the reason for the split is to provide that focus.”
The main drawback is that, for small shareholders, the process is “messy”, he says, because they will be allocated a portion of the new company’s shares in proportion to their shareholding and in some cases that will leave them with small holdings in two companies.
Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.
| « UPDATED: Australian hedge fund appears in NZ | Sovereign takes regulation bull by the horns » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
