It has developed an innovative investment style focused on alternative investment sectors. It currently manages over $280 million on behalf of investors in both Australia and New Zealand.
The deal means that Absolute will get improved distribution for its funds through ABN Amro in Australia and New Zealand.
This partnership will combine the investment and structuring expertise of Absolute Capital with the full range of products and services provided by ABN Amro, including debt and equity origination, foreign exchange, interest rate risk management, treasury and custody.
ABN Amro head of financial markets in Australia, Col McKeith, said that the Absolute Capital business was a strong strategic fit for the Bank, particularly in bridging the bank’s strengths in capital markets origination with retail and institutional demand for alternative investments.
"There is strong demand among investors, particularly retail investors, for high yield products. Absolute Capital’s ability to structure and package debt, equity and hybrid products is a natural fit with the retail distribution platforms of ABN Amro Morgans (Australia) and ABN Amro Craigs (New Zealand),” McKeith says.
Both ABN Amro firms have recently created and promoted hi-yield CDO backed investments.
Absolute Capital managing director Deon Joubert, said that the partnership will add significant value to its business model and provide a stronger platform as the company entered a new growth phase.
“Absolute Capital has a distinct focus on debt oriented strategies and ABN AMRO’s global origination, services and distribution capabilities will add a new dimension to our business. This relationship will allow us to focus on our core skills of developing specialist financial products and enhance our ability to deliver stronger growth in funds under management,” Joubert says.
The partnership deal is not unusual for ABN Amro as it has previously taken stakes in other related businesses.
An agreement is expected to be reached before the end of the year, subject to shareholder and internal approvals, and completion of due diligence.
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