King takes King as IRG seeks mates
Phillip King has sold his Tauranga-based financial advisory business Ellerlie Cornwall to the NZX-listed Investment Research Group (IRG) for an undisclosed cash and scrip settlement.
Friday, September 5th 2008, 11:12AM
by David Chaplin
“We don’t want to take on any contingent liabilities,” King said.
A Sunday Star Times article last year alleged former clients of Ellerlie Cornwall were considering legal action over investments placed by the firm in failed finance company Bridgecorp. The same paper also ran a story in March this year claiming the firm was facing further litigation from former clients over another failed investment.
However, (Brent) King said the Ellerlie Cornwall business was a good fit with the other advisory firms now in the group - the original IRG advisers, a business owned by Stephen Rogers and the recently-purchased Equity Investment Advisers.
He said following the purchase of Ellerlie Cornwall, the IRG now has funds under management of approximately $630 million, of which about $80 million is administered via the Aegis platform.
Ellerlie Cornwall, with about $120 million in funds under management, was associated with The Portfolio Group, a group of advisers who use the ING OneAnswer platform.
King said if the clients agreed it may be appropriate to transfer Ellerlie Cornwall assets to Aegis.
“There is a further benefit for IRG in that there are clients of the former Equity Investment Advisers in Tauranga whom we have not been able to service,” he said.
King also said IRG was interested in talking to other financial advisers.
However, at a group level IRG (which changed its name from Viking Capital on August 11 this year) the results have been poor with the business booking a $5.5 million loss in Dorchester and a further $8.6 million loss with an investment in ICP Bio.
“This year we have losses and reduction in shareholder wealth,” King said in a speech to the group’s AGM yesterday.
IRG also announced two warrant issues at the AGM with further details to be revealed in a few days.
“The capital will be used to further the development of the business and the issue recognises the existing shareholders for their loyalty,” King said. He said in the speech IRG now has “a very significant business in the advisory sector”.
“This is our sole focus and how we will gain significant income for the future,” King said.
Phillip King was not available for comment.
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