Dorchester devours Direct
Dorchester Pacific continued to fill its appetite for financial services businesses yesterday by announcing it was to pay $2.75 million for Wellington-based sharebrokers Direct Broking
Wednesday, February 9th 2000, 12:00AM
Direct Broking is a niche broker that runs an online share execution service and a small managed fund business. Last year it bought the Renouf Asset Management business that includes two New Zealand share passive funds (the First Fifteen and Second Fifteen funds) and one actively managed international fund. Direct's fourth fund is a cash management account.
Dorchester's latest deal follows hard behind its purchase of the Invincible Life business late last year and the acquisition of Equity Research (now called Equity) in July 1998.
Dorchester chairman Murray Radford says the latest purchase would "augment and complement the range of services that Dorchester companies offered to investors and the business community."
Direct and Equity will continue to service their own clients from their existing bases in Auckland and Wellington.
Dorchester managing director Brent King says there are no plans to integrate the two businesses.
He says Dorchester bough Direct as it needed to have a sharebroking business to service its growing client bases.
He says Dorchester's broking business, which was formerly handled by Frater Williams, had become so big it was better to do it in house, as opposed to contracting it out.
Dorchester plans to keep and grow Direct's managed fund business, which according to IPAC Securities had $3.5 million under management at December 31.
The Direct purchase would be made up of $1 million worth of Dorchester shares and $1 million of Dorchester Finance subordinated notes, plus $600,000 cash.
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