News Round Up

Pyne Gould settles funds management deal; TOWER opens offices: Options portfolio hits five-year mark.

Saturday, August 22nd 2009, 4:29AM

Pyne Gould Corporation’s new asset management company, Perpetual Asset Management, has completed its purchase of Equity Partners Asset Management (EPAM) for $18 million.

PGC chairman Sam Maling says that the purchase is an important strategic initiative, and will move PGC a step closer to achieving its goal of becoming New Zealand’s only publicly listed banking and asset management company.

“The purchase of this established New Zealand based asset management business gives Perpetual Asset Management the basis from which to build a substantial business that will be able to offer services and products to the many customers of the PGC group.

EPAM, through the deal, will have the EPIC Fund, which focuses on infrastructure. EPIC has approximately $150 million of assets under management. Another key consideration behind the purchase was that it delivers us the expertise to manage the Torchlight Credit Fund.

Torchlight is being established as an unlisted credit fund available to only eligible investors with an expected average investment of $1 million per investor. Torchlight takes higher risk/higher return credit positions that are inconsistent with bank lending. Most current opportunities are in real estate, but Torchlight has the ability through its management expertise to take positions in other asset markets if it wishes.

Options hits five year mark
Fidelity Life's unique Options Portfolio has racked up a five year anniversary recovering the losses made in the past year.

The options portfolio is a cash fund that issues options on Fidelity Life and other government bonds. This alternative, fixed-interest strategy produces volatile returns that are expected to out-perform pure fixed interest over the medium to long-term.

Fidelity Life marketing manager Peter Lee says the past year has been "a turbulent one for most investments, so we're obviously delighted that the portfolio has come through such a tough period."

He says the portfolio aims to achieve 10% before tax and after fees by investing in cash deposits, bills and other short-term financial instruments and issuing derivatives.

Since inception, the Options Portfolio has attracted more than $56 million, including $13 million via Fidelity Life's KiwiSaver scheme and returned an impressive 8.42%, after tax and fees, despite turmoil on financial markets during 2007 and 2008.

Lee says the original aim of 10% after tax and fees for what is a high-risk investment still remains. "We think the 8.4% return is excellent considering what the market has had to go through in the past couple of years."

IRG resolves bank covenant breach row
Investment Research Group, the NZAX-listed investment vehicle, has reached agreement with its bankers, following a breach of banking covenants that prevented the company filing annual accounts and led to a share trading suspension. [Read More]

TOWER opens offices
TOWER has decided top open a branch in Dunedin's city centre, and is planning to open branches in other major centres across the country.

TOWER Insurance chief executive James Douglas says many people have been affected by the recent closures of insurance and bank branches. "While local residents can still do business over the phone, many people simply prefer to do business face to face with real people. That's what our Dunedin branch opening is all about," he says.

"After listening to our customers we recognised the need for physical branches, which will complement our 0800 and website service. Early on in our research we identified that Dunedin was our number one priority," he says.
The new branch offers car, house, contents, travel, rural and business insurance; Health & Life insurance products as well as Investment and KiwiSaver.

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