The Australian-based Challenger International Group, which is 20 per cent owned by Kerry Packer, has bought all of Coronet Asset Management for an undisclosed sum.
The Australian-based Challenger International Group, which is 20 per cent owned by Kerry Packer, has bought all of Coronet Asset Management for an undisclosed sum.
Coronet, which has $200 million under management, is a niche New Zealand equity manager run by James Ring and John Phipps.
Challenger is primarily an innovative product manager that plays a significant role in the annuities and mortgage market in Australia. It is better known in New Zealand for its Endowment Warrants (for more on Warrants visit Challenger's page on Good Returns).
Under the takeover deal Challenger will pay a mix of cash and shares with the final price being based on Coronet's performance in the next 12 months.
Ring and Phipps are now on three year contracts to stay with the firm, and former chairman Frank Pearson remains involved in the business.
Magnate Peter Spencer, who owned about 15 per cent of Coronet, has completely sold out of the business.
Challenger representatives Bill Ireland and Rodger Bacon will replace the Spencer interests on the board. Ireland, who is Challenger's executive chairman, will become the chairman of Coronet.
Ring says Coronet had been looking at the Australian market for some time now and had considered setting up an office across the Tasman.
Under this arrangement Coronet will help Challenger expand its A$300 million funds management business in Australia.
"Coronet has always viewed Australia and New Zealand as one investment market," Ring says. "Combining with Challenger represents a natural progression in the company's development." (For more on this click here).
"Being a niche New Zealand fund manager is no longer the road to making money for our clients," he says.
Coronet will now have full access to Challenger's Australian-based investment team who have built a successful investment performance track record over the past five years.
Coronet will stick to its value investing, performance-based fee formula.
