Investec says the completion of the sale of its Private Banking business marks a significant milestone for its Australian operation and it will now be able to focus on delivering solutions for corporate, institutional and Government clients across its core niches.

Investec Australia Limited (IAL) today becomes the new Australian entity for the Investec Group after Bank of Queensland acquired Investec Bank (Australia) Limited (“IBAL”) on the 31^st July 2014. IBAL was acquired in order to facilitate the transfer of the Professional Finance and Asset Finance & Leasing businesses.

Investec has transformed its business in Australia to focus on its core specialist niches of Corporate Advisory; Aviation Finance; Resource Finance; Infrastructure Finance and Investment; Corporate & Acquisition Finance; Financial Markets; and Property.

Milton Samios of Investec Australia said: “Our commitment to our Corporate, Institutional and Government clients remains unchanged and IAL is now better positioned to offer clients access to the larger balance sheet and global capabilities of the broader Investec Group”.

Mr. Samios noted a range of recent high profile transactions that demonstrated Investec’s breadth of expertise and reinforced the ongoing strength of the business.

“In recent months Investec has advised PAS and SCA on their listing; and recently advised the shareholders of Ingeus on the sale of their business to Providence Service Corporation; provided acquisition facilities to Northern Star and Troy Resources; launched a new aircraft leasing business; and announced a partnership with the South Australian Government to deliver a unique affordable housing solution in Adelaide.”

Investec has three principal markets – South Africa, UK and Australia – along with offices throughout Asia, Europe and the US.

Investec retains a strong presence in Australia with over 100 staff in Sydney, Melbourne, Brisbane, and Adelaide.

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Specialist bank Investec Australia is ramping up its holistic banking offer to financial planners, offering 100,000 Qantas Points to new credit card clients who are approved for an Investec Signature Card during the month of July and spend over $15,000 within 3 months.

For clients who take out a Platinum credit card in July, Investec are offering 50,000 Qantas Points if they spend $5,000 or more within 3 month.

The new credit card offer forms part of Investec’s suite of exclusive personal banking offers for financial advisers, following the announcement earlier this year of discount mortgage rates specifically for IFAs.

Investec Australia’s Head of Adviser Services, Gareth Bird, said the credit card offer cemented the bank’s commitment to providing advisers with tailored personal banking solutions designed specifically for this market.

“Our pedigree as a specialist lender puts us in the perfect position to offer more flexible, responsive banking offerings to advisers. We see the credit card offer as a natural extension of that, rewarding our adviser clients with a unique personal banking experience they may not get from their usual lender,” he said.

The announcement also follows the news in early April that Investec’s Professional Finance business has been acquired by BOQ. Mr Bird said the sale would provide further opportunities for the bank to offer new and innovative personal banking products for advisers.

“The Bank of Queensland acquisition provides the ideal infrastructure and balance sheet for us to broaden the scope of our banking offering to advisers, and we expect to offer a broader range of banking products and services in the near future,” he said.

In addition to preferential home loan rates, Investec Australia offers a number of bespoke personal banking solutions for the adviser market including LMI-free mortgage options, commercial property lending for SMSFs, and vehicle finance.

“As experts in this space we have been able to tailor a number of banking products specifically for advisers,” Mr Bird said. “Our six year history of working closely with adviser clients has given us the specialist insight to be able to build a banking offering for advisers themselves.”

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Hein Vogel

Fund managers are looking at alternative options to achieve scale in what is becoming an increasingly competitive market.

The merging of fund managers to boost funds under management, such as the recent Access Capital and Challenger deal to form boutique infrastructure manager Whitehelm Capital, is likely to be an increasing industry trend according to Investec Bank (Australia) Limited (Investec).

Whilst international companies continue to look for opportunities to enter the Australian market, domestic players are starting to pro-actively seek out scale opportunities – either by partnering with an “aggregator” or an industry peer.  In addition to advising on the Access Capital transaction, Investec has also been working with an Australian hedge fund to review its strategic options.

Hein Vogel, Executive Director, Corporate Advisory at Investec said following a spate of transactions in the wealth management space, fund managers are now feeling the margin pressure as part of the wealth management value chain and are actively looking at their options.

“The funds management space is moving at a rapid rate and continues to grow off the back of the legislated superannuation system. However, as the industry matures, managers are under increasing pressure to reduce fees to win large mandates, which requires a greater level of funds under management to make sure that the business is sustainable,” Mr Vogel said.

There has also been interest from overseas players looking for opportunities to buy firms as a means of expanding into this market.

“The proliferation of multi-boutique models also means a steady stream of buyers are looking for the right businesses to provide seed capital and support services to.  In the short term, alternative asset classes like infrastructure and fixed income area receiving the most attention.

“Financial services including wealth and asset management is a core area of focus for Investec and we are excited to see activity in the sector including the completion of the merger which has resulted in Whitehelm Capital,” he said.

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Ciaran Whelan

Investec Bank (Australia)  announced last Friday that its parent company Investec Holdings (Australia), has entered into a definitive agreement with Bank of Queensland (BOQ) to sell its Professional Finance business which includes its deposits business, and its Asset Finance & Leasing businesses in Australia.

The agreement is subject to customary closing conditions such as counterparty and financier consents and approval from the Australian Prudential Regulatory Authority (APRA).

Following the sale, the Investec Group will cease to own an ADI but will retain a significant business in Australia focussing on its core strengths across Corporate and Institutional Banking, Property Funds Management and Investment Banking.

Late last year, Investec announced it had appointed independent advisers to identify alternatives for its Professional Finance and Asset Finance & Leasing businesses.

The businesses are being sold as a going concern with a total team of over 310 people transferring to BOQ.

“The agreement with BOQ represents a significant opportunity for both the Professional Finance and Asset Finance & Leasing businesses as they pursue their next phase of growth,” said Investec CEO Ciaran Whelan.

“Investec Group remains committed to the Australian market. We have an experiencedleadership team with a focused business backed by a strong global balance sheet and parent. We are in a good position to concentrate on what we do best within our specialist niches and to demonstrate our distinctive approach.”

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Specialist bank Investec Australia has reduced the interest rates on its tailored home loan offering for financial advisers.

Advisers will now be able to access home loan packages from as low as 4.54% p.a. for two-year fixed rates* (4.79% p.a. comparison rate**), and 4.79% for variable rate loans* (4.84% p.a. comparison rate**).

The new interest rate offer follows an announcement by the bank late last year that it would actively target its existing network of independent financial adviser firms as well as the broader adviser services market, offering bespoke personal banking solutions including LMI-free mortgage options, commercial property lending for SMSFs, and vehicle finance.

Investec Australia’s Head of Adviser Services, Gareth Bird, said the rates reduction reflected the bank’s continuing commitment to provide advisers with flexible, responsive banking offerings designed exclusively for this market.

“Our position as a specialist lender allows us to partner with advisers in a way that very few others in the market are able to. We’re pleased to be able to add preferential home loan rates to that offering, and extend even further the range of tailored products we provide to professional IFAs,” he said.

The reduced rates available to IFAs also present an attractive offering given market conjecture that official Reserve Bank interest rates are unlikely to move lower than their current level. The RBA has held rates at 2.5% since August 2013, and economists are predicting a rise in the medium term, creating an opportunity for advisers to lock in a great value deal.

“As experts in this space we have been able to tailor a home loan offer specifically for advisers”, he said.

Mr Bird said the adviser services team would continue to innovate when it came to offering competitive banking solutions for advisers.

“Over the past six years we have worked closely with the client’s of advisers, and are now in the process of broadening our offering to include personalised lending designed for the advisers themselves,” he said.

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Investec offering bespoke personal banking offering for financial advisers.

Specialist Bank Investec Australia has broadened its position in catering to niche professional clients with the rollout of a bespoke personal banking offering for financial advisers.

Investec Australia currently works with around 250 independent financial advice firms nationally, managing approximately $750 million of their client funds. To build on this strong adviser presence, the bank is now actively seeking to specifically provide financial solutions for advisers themselves.

According to Investec Australia’s head of IFA distribution, Gareth Bird, the focus on financial advisers will incorporate flexible lending practices similar to those offered to other niche market segments such as medical, dental and accounting practitioners.

“Financial advisers are a unique group of clients with a distinct set of banking requirements. The ability to offer a bespoke range of products to this market segment follows many years of working alongside them and their clients, so we’re already familiar with their financial needs.

“To date, there have been very few banking solutions developed to specifically help financial advisers effectively and efficiently manage their own personal finances. We have a strong track record in providing bespoke solutions across professional services and by understanding specific needs of financial advisers we are able to provide niche banking services in one convenient bundle,” he said.

Investec Australia is now offering financial advisers the following products:

• Residential mortgages and investment property – including the ability to borrow up to 90% for residential and 85% for investment loans with no Lenders Mortgage Insurance, and up to 70% LVR for commercial property within a SMSF
• Car loans – including finance available for new or used vehicles and the ability to use an Investec credit card to buy a new car and earn Qantas Points on the purchase as well as rolling the expense into a fixed term contract with Investec and earn more Qantas Points on the monthly repayments.
• Premium credit cards, including Visa Signature and Platinum credit cards – including no cap on how many Qantas Points can be earned and complimentary travel insurance
• Investec One Account provides an unparalleled bundled offer incorporating a high interest savings account, an optional overdraft facility up to $30,000, a debit card, online and mobile banking functionality, and around-the-clock personalised service.
• Foreign exchange expertise – including access to experts who can help with conversions, overseas transfers and quotes on live exchange rates, same day transfers with no minimum value, competitive rates, and access to currency deposits in USD, EUR, JPY and GBP
• Competitive savings account – including a range of term deposits which have been awarded
• ‘Best Value Term Deposit’ 2012 and 2013 by Canstar, commended for it’s high interest, flexibility and innovative features

Mr Bird said the move by Investec Australia to offer financial advisers a tailored personal banking service which is out of the ordinary, is designed to provide a more responsive and flexible offering than major financial institutions.

“In their own dealings with clients, financial advisers strive to give a streamlined process with exceptional client service. We now have the capability to offer this value proposition to the advisers themselves, who – by virtue of their own knowledge and experience – seek financial solutions that are tailored, relevant and competitive,” he said.

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The enormous injections of liquidity via quantitative easing (QE) has created a financial ‘Waterworld’, flooding the global monetary system and significantly altering the investment landscape, according to Investec Asset Management Global Strategist, Dr Michael Power.

Dr Power, who is visiting Australia this week at the invitation of Investec Bank (Australia) Limited, presented an analogy with the 1995 Kevin Costner film, Waterworld, where humans were forced to navigate a submerged world.

Dr Power believes the almost limitless liquidity injected to the global monetary system has melted the monetary ice-caps, in the process destroying the traditional risk-free rate investing anchors – or “dry-land”.

“The concept of risk free investing, where capital invested earns a positive after-inflation return has underpinned fixed income and equity investing in the Western world over the last three decades,” Dr Power said. “However, the liquidity injection of central banks has moved developed markets interest rates underwater, sinking many safe haven returns below inflation.”

Expanding balance sheets

Dr Power explained that the ‘Waterworld’ has been created by the dramatic expansion of central bank balance sheets as governments around the world have taken on further debt since 2008. At the same time, the populations of developed economies of the West and Japan continue to age.

“Quantitative easing, in effect, is a frantic effort by Western and Japanese authorities to stop the natural deflation of their economies as the population ages and the size of their workforces start to shrink as a percentage of total population,” Dr Power said.

“Were technological advances and hence productivity so profoundly positive as to offset this demographic drag, economic growth would remain healthy. However, this does not seem to have been the case and Japan in particular has now endured two lost decades of growth and the question on where to invest is becoming more difficult to answer,” he said.

Where to find dry land?

Dr Power believes that the ultimate destination for capital is “dry-land” – in other words, new safe havens offering new risk free rates with real yields that reset the foundations upon which to base both fixed income and equity investment decisions.

According to Dr Power, the challenge for investors as navigators of capital will be to first preserve capital, navigate macroeconomic headwinds, and set course for emerging opportunities.

“As asset managers, we must see ourselves as the navigators of capital, unanchored from the traditional certainties of a positive-yielding risk-free rate. Our challenge is to choose the appropriate vessel, ensure capital is preserved and deal with the structural changes caused by central bank liquidity as new anchor points emerge,” said Dr Power.

He said many of the anchors will be located in emerging markets, and that inflows to Asian currencies already reflect this changing landscape.

“We believe safe havens should offer investors a risk free real return, not a return free risk, which is becoming increasingly difficult to find in developed markets,” he concluded.

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JohannesburgSA

Investec Property Australia, a division of Investec Bank (Australia) Limited, is pleased to announce its intention to list Investec Australia Property Fund (“IAPF”) on the Johannesburg Stock Exchange (“JSE”).

The Fund, which is expected to list on 24 October 2013, will be listed under the Real Estate Holdings and Development sector.

Sam Leon, Non-Executive Director of IAPF, said: “Investec Australia Property Fund is a unique investment opportunity, offering South African investors direct exposure to the Australian property market and currency. The objective of the Fund is to invest in high quality, sustainable and well diversified real estate in Australia. The Fund at the outset is a solid, sustainable platform that is well positioned for growth.”

IAPF is an Australian domiciled real estate investment trust (“REIT”) with a property portfolio which consists of a diverse mix of industrial and commercial assets (eight in total) located across Australia. The properties are well located in major metropolitan cities or established commercial precincts in Australia and have long-term leases and quality tenants in place.  Furthermore, the Fund will be managed by an experienced and entrepreneurial management team on the ground in Australia.  The team’s solid track record coupled with its ability to leverage off the Investec platform provides the Fund with scope for significant growth in the future.

Graeme Katz, CEO of Investec Australia Property Fund, said: “The Australian property market has attractive opportunities and with a long term view, we are confident in the Fund’s ability toenhance value and deliver sustainable returns and long term capital growth for prospective unitholders.”

The Fund’s board comprises of an extremely experienced team, with a mix of South African and Australian members.

Further information is available in IAPF’s pre-listing statement.

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