The Fairfax group has resuscitated its interest in the market for selling retail managed funds online with the purchase of InvestSMART.

Fairfax Digital has bought for $12 million the online business set up by Ron Hodge and Nigel Poole in 1999. This will be merged with Fairfax’s ‘Direct Access’ online service, an initiative of the former Personal Investor magazine (now Smart Money), also in the late 1990s. Several other media and financial services companies established websites with similar aspirations in the last phase of the dot-com boom but most failed to live up to their business projections. CommSec, which dominates the direct online share transaction market, has probably been the most successful with its range of direct access managed funds. But InvestSMART, through its regular newsletters and special offers of alternative investment products and IPOs, developed a loyal client base of investors. According to Jack Matthews, chief executive of Fairfax Digital, Direct Access and InvestSMART have complementary audiences with little customer duplication. He said non-advisory wealth management and online transactional sectors were experiencing strong local demand. The combined service will represent more than $1 billion in funds under management. Hodge and Poole will be joint general managers of the merged business, with the acquisition including a three-year earn-out multiple based on future earnings.