Jul 2010 Financial News

PROVEN set to acquire Guardian Asset Management

Jul 09, 2010

PROVEN Investments, founded by Peter Bunting, Gary Sinclair, Mark Golding and Christopher Williams is all set to acquire Guardian Asset Management Jamaica, reliable sources have informed the Caribbean Business Report. Details of the deal were unobtainable at the time of going to press.

Guardian Asset Management, a subsidiary of Trinidadian insurance powerhouse Guardian Holdings Limited, is headed by Lisa Gomes, who is credited with doing a very good job running the Jamaican based-asset management company. The asset management company also has an arm based in Trinidad & Tobago. Last year saw Guardian Holdings Limited, run by Arthur Lok Jack experiencing some troubling times largely due to its heavy positioning in equities and the lacklustre performance of its international acquisitions Gibraltar-based Insurance company Zenith Insurance and GHL Insurance Services UK Limited.

Guardian then sought to restructure its investment portfolio to reduce its exposure to equities, turning instead to fixed-income securities and bonds. Its last published financial results were encouraging reflecting a vast improvement and indicating that its strategy is paying off. As a member of the Guardian Holdings Group, the team at Guardian Asset Management has over 30 years of investment management in the Caribbean. The Jamaican operations manage third-party client funds and have responsibility for the investment management of the assets and portfolio of the Jamaican companies within the Guardian Holdings Group. Last year Guardian Asset Management Jamaica looked to achieve 31.33 per cent return on average equity. The company ended the year 2009 recording an increase in net profits which came in at J$463.3 million, a vast jump on the J$361.4 million recorded for the previous year. Net revenue came to J$812.6 million with expenses of J$361.4 million.

According to a company release, the company's strategy of aggressively moving to grow its client base was achieved and balance sheet funds under management in the form of repurchase agreements grew by 5.4 per cent or J$942 million, moving from J$17.2 billion at the end of December 2008 to J$18.1 billion at the end of December 2009.

In May of this year, Proven obtained a securities dealers licence from the Financial Services Commission (FSC), heralding its arrival as an advisory services and investment banking business. Earlier this year, Proven's CEO Christopher Williams said: "The Proven model is built around growing shareholder value. It will be a closed-door operation as opposed to the more front-office establishments that prevail in Jamaica. Securities dealers have primarily made money from the efficient utilisation of their capital with the expense line driven by the front door. Proven focuses exclusively on the top-revenue item, which is the utilisation of capital, and eliminates the largest cost, which is the front office. Setting up in St Lucia means we have a more efficient tax structure. So given the changes in the environment, the business model is perfectly timed."

Proven successfully raised US$20 million in late January of this year when 150 private and institutional investors took up 200 million shares in the company. Proven, with the acquisition of Guardian Asset Management, is looking to build critical mass and establish a beach head in the service delivery and financial advisory market and has employed Paul Simpson, who was a respected wealth advisor at Guardian Asset Management to head up this arm of its operations.

Proven has been seeking to establish a strong balance sheet, as within six months its brand is becoming recognised. Its leading personnel can be expected to bring radical changes to Guardian Asset Management's Jamaican operations.


Source:
Al Edwards
Jamaica Observer
Friday July 9, 2010

http://www.jamaicaobserver.com/business/PROVEN-SET-TO-ACQUIRE-GAM_7784861