WA Local Govt Super buys half of Grove Research

Western Financial, the business arm of the $1.4 billion WA Local Government Super Plan (WALGSP), has purchased a 50 per cent stake in investment advisory firm Grove Research from Apostle Financial Group.

Grove has appointed as executive chair Ross Wraight, a former chief executive of standards assessment firm SAI Global. He replaces chief operating officer of Apostle, former FuturePlus chief executive Brett Westbrook, however Westbrook will remain on Grove’s board. WALGSP chief executive John McNally and Western Financial business development manager Paul Owen have also joined Grove’s board. Wraight said Larry Case would “;probably”; remain on Grove’s board to represent the interests of Mark Carnegie and John Wylie, part-owners of Apostle. Western Financial’s Owen said the Grove stake made strategic sense, as many of its existing and potential clients are “;the same WA local councils who we already go out and visit and talk to about super”;. Western Financial was created in 2006 as a fully-owned trading arm of WALGSP, housing its internal administration team and designed to have the “;flexibility”; to make investments which a super fund could not make directly under the sole purpose test, Owen said. For instance, it houses a team of financial planners under the FuturePlus licence. Grove currently advises over 100 institutional clients with $2.6 billion under management. Its new owners plan to extend its council-dominated client list into other organisations with “;lazy balance sheets and lumpy cash inflows”; such as universities and hospitals, Owen said. Wraight said that councils needed independent advice now more than ever, especially those who had invested in “;overly complex”; instruments whose advertised “;capital security”; had been in perception only. “;Grove copped some criticism for being too conservative…now some of these councils are coming to us seeking advice on whether they should sell or hold some of these distressed instruments,”; he said.