m Cubed Holdings
Press Release
Listed financial services group m Cubed Holdings (m Cubed) has acquired a
50% stake in Policy Exchange (Polex) from management, making it one of the
largest players in the fast growing second hand endowment policy market
The transaction is effective retrospective to 01 November 2001 and will make
a positive contribution to m Cubed's results in the next financial year. It
will not however have a material effect on the group, but will contribute to
the increase in annual annuity income.
m Cubed group managing director John Storey says the group has purchased a
further 20% share in Polex, pending Competition Commission approval. Polex
management will retain 30% of the company, while m Cubed has the right to
acquire this stake during February 2005. Polex will become a member of the
m Cubed group, but retain its name, at least initially.
Storey say the transaction opens up a range of new product development
options for the group. "We expect to at least triple turnover in the next
two years. The company has secured a strong supply of second hand policies,
which is the crucial element to success in this market." Polex aims to
concentrate on m Cubed's institutional market, though it will do some
tailored transactions for the independent retail brokerages that support m
Cubed.
Nick Kruger, managing director of Polex, sees the following benefits for m
Cubed that should accrue through a powerful foothold in the second hand
endowment market: access to additional broker relationships through Polex's
existing relationships, new product development opportunities for both
retail and institutional clients and a yield enhancer for low volatility. Of
the R6.6 billion surrenders a year in South Africa, about 35% are tradable.
"We now have the opportunity for large upside potential from this market,"
says Storey. "It expands our service offering to clients on both the retail
and institutional fronts."
Polex has traditionally operated in the retail market. The transaction
gives Polex access to m Cubed's suite of licences and product development
expertise, which will facilitate its distribution to the institutional
market as well.
Another key benefit for Polex includes a potential international secondary
endowment base which will be strengthened by the expertise of shareholder
Scottish Life, benefiting both the retail and institutional markets.
Ends
ISSUED FOR : M CUBED HOLDINGS LIMITED
CONTACT : JOHN STOREY TEL: 011 340 2301 / 083 675 2664
FAX NO: : 011 880 8844
E-MAIL : jstorey@mcubed.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : TISH STEWART TEL: 011 325 4195 CELL: 082 443
6399
FAX NO : (011) 325-4199
E-MAIL : Tish@tspr.co.za
DATE : 23 JANUARY 2002
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