| Thu 2 Sep 2004, 17:42 | | MOMENTUM AND M CUBED |
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M CUBED HOLDINGS LIMITED - MOMENTUM AND M CUBED CREATE MEGA MULTI-MANAGER
M CUBED HOLDINGS LIMITED
SHARE CODE: MCU
ISIN: ZAE000033353
MOMENTUM AND M CUBED CREATE MEGA MULTI-MANAGER
Listed financial services company m Cubed and Momentum today announced that
agreement has been reached to merge the domestic multi-management businesses of
Momentum and m Cubed, to form a new asset management holding company. m Cubed
and Momentum will each hold 50% of this new company.
The m Cubed institutional asset management business, which has R30bn in funds
under management, has been valued at R184m (this includes the Escher Structured
Products and Asset Management Outsourcing Services divisions), while the
Momentum business, which has about R12bn of funds domestically, has been valued
at R40m.
The additional purchase consideration payable in cash to m Cubed by Momentum
after injecting their multi manager business to take their stake up to 50% will
amount to R72m. With more than R42bn of funds under management this new entity
will be the second largest multi-manager in the industry by a big margin.
The independence of the new business will be entrenched from the beginning, by
having its own separate board, which will include non-executive appointees. m
Cubed and Momentum will have equal representation on the board of the new
business. Charles Bothner, currently chairman of m Cubed Holdings, will be
chairman of the board with Frans Truter, CFO of Momentum, appointed as deputy
chairman. The executive directors will consist of Anne Cabot-Alletzhauser, Wayne
McCurrie and Morris Mthombeni.
Commenting on the transaction, Truter said: `The merger of the two asset
management businesses will bring significant benefits to m Cubed and Momentum.
The merged entity will represent a powerful player in the industry and, with the
combined multi-management skills will be well poised for growth.`
Truter believes that there are significant growth opportunities for multi-
manager asset management as an asset management approach, especially for pension
funds. Furthermore, this transaction gives the new company access to Momentum`s
proven distribution channels and, more specifically, greater access to the
retail market. The new company will have the benefit of having a strategic
shareholder of the calibre of Momentum.
Morris Mthombeni of m Cubed Asset Management said: `We will operate
independently of any asset manager and asset management consultant. Added to
this, a new identity will be created for the new business.
`While most retirement funds are managed on a multiple manager basis, the
combined entity will provide a controlled multi-manager approach based on an
understanding that diversification of risk involves more than just asset class
diversification; it requires sophisticated diversification across investment
managers and investment styles.
`While this is an exciting deal, there is more. The new business announced
today is a stepping stone for us as this merger creates a platform for an
empowerment transaction, a goal which we are currently pursuing.`
The merged business will consist of the m Cubed asset management business,
Escher Structured Products operations, m Cubed`s Asset Management Outsourcing
Services divisions and Momentum`s domestic multi-management business.
The proposed deal will be presented to shareholders of both businesses and is
subject to approval by the necessary regulatory authorities.
ends
Note to the editor:
Spokespeople concerning the new company are:
Morris Mthombeni: 082-902-6127 - MD, m Cubed Asset Management
Frans Truter: 082 800 1038 - CFO, Momentum Group
