Australia-based Shaw and Partners will pay $67.5 million for 75% of Investment Services Group (ISG), which owns the Devon Funds, JMI Wealth, Select Wealth, Clarity Funds and TAHITO brands in the wealth management space, chair Paul Glass confirmed.
Shaw is owned by Swiss-based private bank EFG International and the transaction is conditional on the approval of the Swiss Financial Markets Supervisory Authority (FINMA), but is expected to settle on July 1.
Glass, who currently owns nearly 48% of ISG, says each of the current shareholders is selling 75% of their holdings and that the transaction includes requirements for the current senior executives to continue working in the business.
“We enjoy working together and we wanted to keep doing that,” Glass says.
Glass himself is 59 and the ages of other senior managers range from about 54 to 70.
The latter is JMI Wealth founder Alan Lee – JMI will rebrand as Shaw and Partners while the other brands will continue as they are.
Glass says Lee “wants to do another five years.”
ISG began a strategic review last year with external adviser Murray & Co and the Shaw purchase is the outcome.
Glass says ISG had considered alternatives, such as selling to a private equity firm, “but that tends to be more of a transitional ownership structure,” as well as merging with another NZ firm, but that would have effectively meant the end of the group’s growth prospects.
“We wanted to keep our own identity,” and the Shaw purchase allows for that.
It also provides additional financial clout as Shaw has A$35 billion of assets under management and EFG’s international businesses manage about NZ$330 billion and it has a market capitalisation of about NZ$9 billion.
EFG initially bought into Shaw in 2019, paying up to A$61 million for its initial 51% stake in a mix of cash and EFG shares – at the time of that purchase, Shaw had about A$15.9 billion in funds under management.
EFG has since bought the other 49% of Shaw, which was founded in 1987 as a stock broking firm and current management took over in 2015.
Glass wouldn’t say how the purchase of ISG is being paid or whether it included any EFG shares and nor would he say whether there were any earnout provisions.
Glass says the rebranding of JMI “wasn’t something Shaw have required in any way. They’ve left it entirely up to us.”
But after looking at Shaw in Australia, “we thought it made a lot of sense to carry that brand across.”
The Australian firm has established the Shaw Foundation, which has donated A$15 million to charity, and there are plans to introduce it to NZ, he says.
Evans and his wife, Katie, are also “the driving force” behind raising funds for the Sydney children’s hospital – Glass notes that a single fund raising dinner managed to raise A$84 million for the hospital.
Shaw also has some sports sponsorships, including being the primary sponsor of the Manly Warringah Sea Eagles, and will look at bringing some events to NZ.
There are some further changes at ISG in the wind: “We will have some further announcements in due course, some exciting developments that we hope to be able to share soon.”
