Speculation is mounting that a deal is brewing between the Soul Patts-backed wealth management firm Ironbark Asset Management and its New Zealand peer, Craigs Investment Partners.
The suggestion is that Ironbark could be buying a half share in the Craigs business in a deal under which it could outlay about $NZ200m.
Chaired by former CBA boss Ralph Norris, Craigs is one of the main names across the Tasman in the wealth management and advisory sector, and has a strategic alliance with the Australian arm of Wall Street bank JPMorgan.
A deal would mark a debut by Ironbark into New Zealand, including in the area of securities trading and investment banking operations, in its quest to strengthen its wealth-management presence.
It would pave the way for further distribution across the Tasman of Ironbark wealth products.
Ironbark is led and co-founded by Chris Larsen, who previously headed Deutsche Bank’s asset management business in Australia.
The wealth manager creates products for financial adviser networks, and Australian-listed conglomerate Soul Patts is a major investor.
The business was founded in 2009 and offers solutions for retail, wholesale and institutional clients across Australia from offices in Sydney and Melbourne.
It has over $76.3bn of funds under management, trusteeship and advice.
Acquisitions are known to have been on its agenda for some time.
It was understood to have been weighing an acquisition of minority stakes in 16 AMP financial advice practices for sale, with AZ NGA winding up as the buyer.
Craigs, meanwhile, describes itself as one of New Zealand’s largest investment advisory firms, providing a range of services for private wealth, corporate and institutional clients.
The business also rates as one of the country’s top retail brokers.
It competes head-on with Forsyth Barr, which has a strategic alliance with Barrenjoey – and FirstCape, the business consisting of the previous Jarden Wealth and JB Were New Zealand businesses now partially owned by Pacific Equity Partners.
The deal would be the third time that Craigs has been partially owned by offshore interests, as Deutsche Bank was previously a part owner.
Craigs bought out Deutsche Bank from its 49.9 per cent equity interest in the business in 2019 after the German lender announced a global retreat from equities.
Before that, Dutch bank ABN Amro owned half of the company and became the subject of a management buyout before Deutsche then bought in during 2010.
With Ironbark’s expertise centred on wealth management, it calls into question the future of the securities trading and investment banking operations of Craigs, which may be spun off or sold, as it’s non core to the overall operation, according to a market expert.
The challenge would be extracting any substantial price for those operations, as most of the value is tied up in the staff who can leave.
It suggests another option could be for the group to hand the keys to management or other industry operatives.
Both Ironbark and Craigs did not comment when approached by DataRoom.
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