CBA buys stake in Snowball

Commonwealth Bank of Australia (CBA) has claimed a substantial holding in diversified financial services company Snowball Group, buying half of the equity stake previously held by Equity Partners Two (EPT).

In a recent announcement to the ASX, CBA confirmed it had bought, through wealth management arm Colonial First State (CFS) and the Avanteos platform, a 5.6 per cent stake in Snowball. CFS now owns eight million Snowball shares while Avanteos owns 68,826 shares. Snowball managing director, Tony McDonald, said CFS had bought half of private equity firm EPT’s holding as an investment in its small-cap fund. “;It’s about Colonial First State making an astute investment,”; McDonald said. Another source close to the deal said CBA could be interested in exploiting Snowball’s distribution channels, Outlook Financial Solutions and Western Pacific Financial Group(WPFG). Both Outlook and WPFG primarily use the Asgard and Symetry platforms. McDonald, however, flatly denied this prospect. “;It’s about asset management,”; he said. Snowball bought WPFG in early February from Officium (formerly Western Pacific Group Holdings), resulting in the non-institutionally owned Snowball group growing to employ 80 financial planners and hold $4 billion in funds under advice. Snowball also owns CWM Accounting Services. With its 5.6 per cent holding, CBA joins three other financial services companies as significant shareholders in Snowball: Officium, which owns a 55.5 per cent stake; Contango Asset Management, which owns a 6.1 per cent stake; and EPT, whose 11.2 per cent holding has recently diluted to 5.7 per cent. CFS fund managers would not comment on the motive behind the acquisition.