Archive media release
23 April 2002
Westpac and Rothschild's springboard for funds management growth
Westpac Banking Corporation and Rothschild Australia Asset Management Ltd today announced that they had reached agreement on the terms for combining their funds management businesses to form a new organisation.
This follows agreement between Westpac and Rothschild for Westpac's acquisition of the Rothschild Australia Asset Management business for $323 million in cash.
The organisation will be independently managed and branded and will be headed by Rothschild Australia Asset Management Chief Executive, Peter Martin, who will report to David Clarke, Westpac's Group Executive, Business and Consumer Banking. It will have its own board.
The new organisation will be the fifth largest retail funds manager in Australia (with $17 billion of retail FUM) and eighth largest overall (with $34 billion of total FUM).
Importantly, it will strengthen Westpac's distribution capability, a key element of Westpac's overall wealth management strategy. This includes entrees to the independent financial adviser distribution network, including Rothschild's Premier Adviser Service, comprising over 1000 independent financial advisers, as well as Westpac's 765 financial advisers and planners.
Westpac's Chief Executive Officer, David Morgan, said: "The combination of Westpac and Rothschild's Australian wealth management businesses provides Westpac with a springboard for accelerated growth in this area.
"Westpac has organically built a very successful wealth management business. We now have a stronger and expanded manufacturing base and access to a proven client service model which will strengthen our ability to provide wealth management services to our seven million Australian customers. It is a solid platform for growth.
"Westpac's wealth management strategy will be enhanced by access to a highly rated investment management team with strong recommendations from independent retail researchers and institutional consultants," Dr Morgan said.
Westpac will also benefit from Rothschild's current international strategic alliances, including Putnam Investments and Grosvenor Capital Management.
CEO of Rothschild Australia Asset Management, Mr Peter Martin, said: "We are excited to be part of this new organisation because of the additional growth options it provides and our ability to leverage off the strength of Westpac in this market.
"The new organisation will continue to build on Rothschild's established high quality investment management business and leading service culture.
"We will deliver to the existing client base a broader and deeper range of wealth management products and services. In particular, initiatives under consideration include capital protected growth products and diversified fixed interest products," Mr Martin said.
Detailed planning will be undertaken over the next few months to integrate the two businesses, with the launching of a new brand name expected by the third quarter this year.
The investment management team of the new company will include the key professionals from both Rothschild Australia Asset Management and Westpac.
Dr Morgan and Mr Martin assured customers of both Rothschild Australia Asset Management and Westpac that it will be business as usual during the transition to the new organisation.
The transaction will be cash earnings per share positive after year one and meets Westpac's strict acquisition and evaluation criteria. |
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