New Zealand investors are being given the opportunity to partake in the demutualisation of insurance offices and building societies in the United Kingdom through a listed investment trust.
Auckland-based Broadview Financial Management is promoting the Cairngorm Demutualisation Investment Trust which is targeting rationalisation in the UK financial services industry.
There are 71 building societies and 15 large mutual life assurance companies, with total assets of more than £280 billion, in the UK which have not yet converted, or announced their intention to convert to public companies.
Cairngorm expects a large number of these will demutualise, and that will be followed by a period of mergers and takeovers.
New Zealand investors and policyholders have already profited from the worldwide wave of demutualisation through share floats by National Mutual and Colonial and shares in both companies have posted strong gains since listing.
Broadview director Alistair Pirie predicts share prices of demutualised UK firms will rise, but the jumps in price will be smaller than those experienced by their Australasian companies.
He says the trust will have to be selective in its investments as there will be winners and losers during the reform period.
Cairngorm aims to raise £100 million and will use that money to invest in permanent interest bearing shares, bonds, other debt securities and policies issued by life offices.
This is the first investment trust Broadview has promoted in New Zealand.
New Zealand investors are being given the opportunity to partake in the demutualisation of insurance offices and building societies in the United Kingdom through a listed investment trust.