The ASX-listed Tranzact Financial Services is raising almost $8 million in a renounceable rights issue to fund purchases of financial advisory practices and superannuation master trusts.
In a release to the ASX last week, Tranzact said it would raise approximately $7.9 million in the rights issue with $3 million of that earmarked for buying strategic stakes in financial planning businesses in Australia and New Zealand over the next year. Earlier this month Tranzact invested in two New Zealand financial planning firms, buying 100 per cent of Rutherford Rede Central and taking a 21.4 per cent stake in Prime Planning Partnership. Allan Yeo, Tranzact managing director, said the further acquisitions would be announced in New Zealand shortly while it was “in negotiations” with a few advisory businesses in Australia. “In Australia we’re 12-18 months behind New Zealand in development [of its financial planning strategy,” Yeo said. “Our model is to work in conjunction with advisers to grow their businesses… we don’t want to run a dealer group.” Tranzact will also use a portion of its latest fund-raising to expand its superannuation master trust business. The group currently manages about $130 million in its First Super Master Trust and is in merger talks with the similarly-sized GIS Concepts. The group has signed a memorandum of understanding with GIS to take a 20 per cent interest in the firm. Yeo said there were many similar opportunities in Australia in the super master trust space. “Institutions are not interested in this area and smaller players don’t have the resources to acquire others,” he said. “With the additional capital we can now go for better quality acquisitions.” According to Yeo, Tranzact would also begin to promote its nascent IDPS platform to the Australian adviser market. Tranzact is almost 60 per cent owned by the New Zealand-based Grosvenor group. Tranzact emerged from the remains of Beacon Financial Services, which almost collapsed in 2003 after losing close to $9 million in a derivatives play. Yeo said the group would pay down $1.6 million of long-term debt following the rights issue. Under the terms of the rights issue shareholders will receive two new shares at 25 cents for every five shares they currently own with a further option to buy one more share at 30 cents before April 30, 2010. Acceptances close on May 11. Tranzact’s share price has jumped from a low of 16 cents late in March to
The brunt of losses from the LA wildfires are expected to be borne by primary insurers and high-risk reinsurance programs, but super funds are nevertheless closely monitoring the possible impact of the fires on catastrophe bond and insurance-linked securities exposures.
Simon HoyleJanuary 17, 2025
