Dec 2009 Financial News

Proven seeks US$20m from listing

Dec 09, 2009

THE new investment vehicle led by Peter Bunting, Mark Golding, Gary Sinclair and Christopher Williams will be called Proven Investments Limited and will be looking to raise between US$15 and US$20 million when it lists on the Jamaica Stock Exchange (JSE) early in the new year.

Speaking with the Business Observer yesterday from Kingston at a specially convened luncheon meeting, Peter Bunting said: "The non-compete clause with Scotia Group comes to and end this week, and after two years away from the sector we see many opportunities that have yet to be exploited. We are tried, tested and proven. Dehring, Bunting & Golding (DB&G) did well but we are now moving away from the traditional securities dealers' model that is prevalent in Jamaica. Our focus will not be on Government of Jamaica Global Bonds but more so on US dollar-denominated instruments. We will soon be announcing a private placement and then an Initial Public Offering (IPO). There will be no premium in the pricing and it will all be at book value. The main principals will not be getting in at a level lower than anyone else. We are looking to raise anywhere between US$15 to $20 million and see equity as the way to go. We will be building a balance sheet from scratch with no legacy. We have noted that many companies in Jamaica have benefited inordinately from securities on their balance sheet and that is rather telling."

The new company will operate very much like Warren Buffett's Berkshire Hathaway, in other words, a small team picking companies across the globe.

The former managing director of NCB Capital Markets, Christopher Williams, will serve as Chief Executive Officer (CEO) of Proven Investments Limited with the former minister of tourism Hugh Hart filling the role as chairman. Both Peter Bunting and Mark Golding will play a more advisory strategic role with Gary Sinclair acting in a somewhat more substantive capacity. Chris Bicknell will lend his real sector experience to the team. Bicknell is regarded as one of the most successful businessmen operating in Jamaica today and together with his brother Bruce, heads Tankweld Metals.

Mark Golding added: "There will be no front office. We will be a lean, mean operation without high operating costs and will be passing on returns straight to clients. The Board of Proven Investments Limited has given the CEO a return on equity hurdle to beat and he is very excited about beating it.

We see opportunities for sophisticated investors that can be executed right here in Jamaica and they will be able to gain from the tax advantages coming from our regional and international focus. In effect we will be investing people's capital and using leverage to enhance the ROE by adopting an asset allocation approach. We are not in direct competition with securities dealers and we hope the brokerage community will support the offering. The offer is not just limited to Jamaica."

Bunting made it clear that their interests are fully aligned with those of its shareholders and that they will not be dictated to by margins the way traditional securities dealers are.

It is widely believed that NCB Capital Markets is interested in being the lead broker but the lead principals would not be drawn on this, choosing instead to say that they favour a broker that has a wide distribution network and enjoys a reputable presence in the market. In other words, one of the strongest brands operating in Jamaica today.

Peter Bunting went on to say that he has been contacted by many banking executives expressing an interest in joining the new firm, and more so from former colleagues at DB&G. He is anticipating that the offer will be made at the end of January with all protocols to the JSE observed and complied with. There are no foreseen impediments that should obstruct the listing of Proven Investments Limited.

The principals were at pains to stress that Proven Investments is an investment company as opposed to an investment management company. It raises capital and it is Chris Williams' job to invest that capital and provide an above average return for shareholders.

"Initially the portfolio is expected to be dominated by fixed income instruments. Proven Investments will be looking at publicly traded and privately held investment opportunities. We see the privately held investments filling a void that currently exists in Jamaica. As yet we have not set the minimum requirement for the IPO but I expect it will not be out of reach for most investors,"

For more information on Proven Investments Limited go to the webcast www.buntingisback.com


Source:
BY AL EDWARDS
Jamaica Observer
Wednesday, December 09, 2009

http://www.jamaicaobserver.com/business/Proven-seeks-20-m