Integrated Asset Management has entered into a JV with property tycoon Vincent Tchenguiz's investment company Consensus Business Group Ltd.
Tchenguiz, chairman of Consensus Business Group Ltd, said: "Consensus is committed to developing value partnerships with innovative players in the alternative investment field. We look forward to supporting Integrated's management as it executes its strategy of consolidation in the hedge fund sector. Specifically, we deliver access to actuarial financial applications that can be applied in the hedge fund industry particularly as the hedge fund community is now looking at property for investment purposes. With this in mind, we look forward to working with some of the larger and more successful hedge funds in the industry. In addition, we are confident that there are significant synergies with Integrated across its range of alternative investment activities. We look forward to a growing partnership which will allow us to support these activities and achieve significant growth."
Consensus Business Group is a principal investor in a broad range of synergic activities, including structured finance, the acquisition, management and development of commercial/residential real estate and high-tech start-ups.
Integrated Asset Management's core business is in alternative investment products, fund management and institutional brokerage services. Integrated is owned by a mix of institutional shareholders, management and private investors. The company, founded in 1997, currently has in excess of USD 650 million assets under management and advice.
The JV allies Integrated with an established player in the financial and real estate field, provides an important strategic partner for Integrated's fund of hedge fund consolidation strategy, (highlighted in its year end results, see next para) and broadens Integrated's investor base.
AIM-listed Integrated's year-end results announced in May 2005 contained the following information in the Chairman's report, outlining the company's growth strategy going forward:
"In 2005 we intend to focus our efforts on growing our alternative asset management business. Our quoted status, coupled with our focus in alternative investments, makes us an almost uniquely scalable business. We have created a robust platform and plan to continue exploiting its scalability. As the comparison between 2003 and 2004 shows, a modest 7% increase in turnover resulted in a 200% increase in operating profit. Whilst continuing to pursue organic growth, we recognize that consolidation is a trend affecting both of our business lines: alternative asset management and broking businesses. We intend to be an active player in the consolidation of the alternative asset management sector. To this end we secured additional equity finance of GBP 918,000 in December 2004 which is earmarked specifically for acquisitions. These resources, coupled with the strong indications we have received from international financial institutions interested in co-investing with us and the freeing up of regulatory capital released as a consequence of the reorganisation of the broking business, leave us in a strong position to execute acquisitions. I am therefore confident that we will soon be able to report further significant progress towards our strategic goals."
As part of the joint venture arrangement, Consensus expects to commence a commercial relationship with Integrated's institutional brokerage arm, Integrated Financial Products Ltd.
"The agreement with Consensus was finalised swiftly as we found we shared broadly similar views on the growth and potential for consolidation of the fund of hedge funds sector," said Emanuel Arbib, chief executive of Integrated. "I am confident that our partnership with Consensus will enhance our ability to execute on our stated plan and give us additional leverage to consolidate our market position and pursue our aggressive acquisition strategy going forward."
The JV will be formalised by Consensus taking an equity stake in Integrated. Consensus has agreed to subscribe for 1,000,000 new ordinary shares in Integrated of 20p each at 53p per share. This subscription is subject to the passing of resolutions disapplying statutory pre-emption rights at Integrated's AGM being held on 23 June 2005. In addition, Consensus indicated that it is intending to increase its holding, through market purchases, to an upper limit of 9.9 per cent of Integrated's issued share capital.