Jarden explores M&A for wealth unit

Jarden has told its shareholders its Australian investment banking arm is profitable as it considers mergers and acquisitions for its wealth unit. Picture: iStock.

Australia and New Zealand investment bank and wealth manager Jarden Group is understood to be involved in corporate activity related to its wealth management division.

It comes as the investment bank and wealth manager held its annual general meeting for its investors on Wednesday, updating them on the performance of the group ahead of another share auction that happened on Thursday.

Shares in the last auction held this year sold at $8.50 each and cleared in the Thursday auction at $10.

Jarden’s board of directors were understood to be excluded from Thursday’s share auction due to a corporate transaction related to the company, creating a conflict of interest.

It is understood that the transaction relates to its wealth management unit, buying and consolidating assets.

Jarden previously competed to buy Kiwi Wealth that was sold to the TA Associates-backed Fisher Funds for $NZ310m.

This was last year, and at the time of the transaction, it is understood that Jarden was planning to spin out its own wealth management unit into a separate vehicle, where FNZ would also be a minority shareholder of the business.

Jarden launched into the Australian market in 2020, poaching former high profile UBS bankers including Robbie Vanerzeil, who ran the Australian Jarden operations but has since left, Aidan Allen and Sarah Rennie, among others.

The launch to take on trans-Tasman rivals on the local investment banking scene was given the green light by Jarden’s board including chairman Bill Trotter and hedge fund operator and director David Copley.

However, Copley resigned as a Jarden director last year.

James Lee was Jarden’s chief executive at the time, but has since left the firm.

At the annual general meeting, Jarden’s co-chief executives of investment banking, Sarah Rennie and Aidan Allen, were re-elected to the board, as was Jarden’s head of Wealth and Asset Management Malcolm Jackson, and the group continues to work with Japanese bank Nomura on funding deals.

Shareholders were told that the intrinsic value of the wealth management unit was between 8 and 15 times its earnings before interest, tax, depreciation and amortisation including its debt and its investment banking arm between one and two times revenue, including debt or between 8 and 16 times its net profit, which was comparable to other industry rivals.

This would place a value on its shares of between $21 to $44.

A board review of its operations was also afoot to determine whether the directors had the right skills for their duties.

Shareholders were also told that Jarden generated $NZ8.5 times EBITDA for the quarter after attribution and bonuses from revenues of $NZ71m.

This was in a market where mergers and acquisitions volumes were down 50 per cent for the quarter and equity capital markets volumes depressed amid a slowing economic environment linked to rising inflation and interest rates.

They were told that the Australian investment banking unit was profitable, as the group worked on deals in the quarter including Mirvac Group’s $2bn build-to-rent joint venture, a secondary listing of Light and Wonder and a Navigator Global equity raising.

Balance sheet capital had increased to $153m from $90m of liquid assets and undrawn facilities.

The Wealth and Asset Management business had a strong start in the first quarter, reaching record levels of funds under management, with $NZ10.8bn for advisory and $NZ7.6bn for Harbour and 5 per cent up on budgeted EBITDA.

For the fifteen months to March 31, Jarden Australia, which has about 160 staff, posted a $13.3m loss, as high costs linked to its launch contributed to the bottom line.