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MFS sells 60% of company, Belgrave points out why it is different, ABN Amro cash fund passes $500 million mark.

Tuesday, June 20th 2006, 10:21PM
MFS is planning to offload 60% of its New Zealand operations to a group of Australian and New Zealand investors that includes a subsidiary of global investment and advisory firm Babcock & Brown.

The sale has been arranged with a view to grow MFS’ New Zealand arm so it becomes a significant presence in the country’s financial services sector.

The new ownership group believes impending changes to the financial services legislative landscape in New Zealand will provide an opportunity for the operation to grow rapidly in the near future.

The deal is set to be completed before the end of this month. MFS will retain a 40% stake in the business, and will continue to manage the operation.

Belgrave says why it is different
Belgrave Finance has written to its investors pointing out the differences between itself and failed finance companies Provincial Finance and National Finance 2000.

Belgrave has 27 loans over property as opposed to cars. Director Shane Buckley says these loans are "monitored personally on a weekly basis by (Belgrave) directors."

He says Belgrave has equity levels of 25% which gives it one of the highest equity ratios in the industry. He and fellow director Steve Smith have invested $5 million in the company.

Belgrave has an average loan to value ratio of just under 70%.

ABN AMRO Craigs Cash Management Trust has passed the $500 million mark, making it one of the biggest cash management funds in New Zealand.

Just over half of the funds are held in New Zealand dollars. It also includes foreign currencies including Australian dollars, British pounds, United States dollars and Euros.

"We have always seen cash as a key component of each client’s investment portfolio and have structured the ABN AMRO Craigs cash management trust to meet the changing, and increasingly global, investment markets," the company says.

Another mortgage trust arrives
Praesidium Asset Management has launched a $27 million fixed interest offering under its mortgage trust format.

The offer is of secured Notes issued by Diversified Mortgage Trust No.1 and the notes are in two classes.

The notes pay interest quarterly in arrears and are currently offered at a minimum fixed rate of 7.85% for Class A Notes and 8.65%pa for Class B Notes.

The monies raised will be invested in loans secured by mortgages, acquired from Capital+Merchant Finance.

Comment: Why the silence on Provincial?
One of the more bizarre things in the Provincial Finance collapse has been the reaction (or lack of) from the Financial Planners and Insurance Advisers Association.

The Provincial failure is a huge issue for advisers as many, collectively, had a good sum of money in Provincial. Added to that Provincial sponsored the FPIA and Society of Independent Financial Advisers.[MORE]

« Officials not interested in rating finance companiesRescuers put themselves first »

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