"It's not part of a great strategic plan," he says. "It's just an opportunity that came up."
He says Equitable remains a company that provides fixed interest and assured return products, as well as funding for property and projects.
The decision to buy the Coronet Asset Management business, and its two share funds, from Challenger is all based around relationships and an opportunity.
The deal came about because the Spencer family (of Caxton fame) is a shareholder in Equitable and used to be a shareholder in Coronet before it was sold to Challenger.
The relationship between James Ring, who originally set up Coronet, and Chris Spencer was the catalyst to the deal.
Wilson says it is also a “counter cyclical” buying opportunity. The two funds haven’t done particularly well recently, and there is an opportunity to turn them around.
He says there is about $30 million invested in the two funds so the cost of acquiring them from Challenger wasn’t particularly big.
Coronet was originally established by James Ring and John Phipps when they left Southpac in the mid-1990s. The business was later sold to Australian fund manager Challenger. After that sale Ring moved to Sydney and now runs Challenger’s successful small cap/medium cap Australian share funds, and the Challenger’s New Zealand funds were run autonomously from Auckland by Phipps.
It is proposed that once Equitable takes over the two New Zealand funds will be kept under the Coronet name, and management will be subcontracted back to Ring and his team in Sydney.
Ring says the Coronet New Zealand Equity Fund will invest in Australian and New Zealand stocks with a growth and income bias, while the GAM trans-Tasman Fund will be “smaller company-centric” and again will invest both countries.
Wilson says there is no intention to rebrand the business.
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