Michael Ohanessian

Praemium Limited [ASX: PPS], a global provider of technology platforms for managed accounts, investment administration and financial planning, has announced the launch of a $55.6 million cash-and-scrip takeover offer for Australian wealth management platform Powerwrap Limited.

Praemium’s off-market offer is for all the issued shares of Powerwrap that it does not already own. Praemium currently owns 14.7% of Powerwrap.

Praemium has offered Powerwrap shareholders $0.075 cash and one Praemium share for every two Powerwrap shares held. The offer represents an 82.3% premium to Powerwrap’s 90-day volume weighed average price (VWAP). The offer is subject to several conditions, including 90% minimum acceptance by Powerwrap shareholders.

The Powerwrap board has recommended that shareholders accept the offer.

Anthony Wamsteker, Chairman of Powerwrap, said, “Powerwrap’s board believes the offer presents an excellent opportunity for Powerwrap shareholders to participate in the upside of a merged group that stands to benefit from significant potential synergies. With Powerwrap’s strong customer base and Praemium’s track record of profitability and cutting-edge technology, the benefits to Powerwrap shareholders are clear to the board. We encourage Powerwrap shareholders to take this next step in the Company’s journey.”

Funds under administration (FUA) of the combined group would be more than $27 billion. The combined company would have recorded revenue over the past 12 months of $65 million. Full year EBITDA operating cost synergies are expected (on a preliminary basis) to total $6.0 million by FY2022.

Praemium’s ASX announcement today lists several benefits to Powerwrap shareholders, including:

1. The opportunity to participate in the benefits of a larger merged group, which will be one of Australia’s largest independent specialist platform providers on a combined funds under administration (FUA) basis.
2. Reduced operational, financial and competition risk associated with continuing to hold Powerwrap shares on a standalone basis, while gaining exposure to Praemium’s proven track record of profitable growth.
3. Significant potential synergies of the merged group.

Michael Ohanessian, Praemium Limited CEO, said the simple rationale of the offer was that the two companies represent a good fit.

He said, “We know Powerwrap well as one of their core technology partners. Together we are stronger with significant synergies between the two companies and higher growth potential in a combined entity. We believe the merged company would be a formidable force in the Australian platform industry, and are happy that the Powerwrap board sees the value and has recommended that their shareholders accept the offer to share in the success of a larger and better combined company.”

Barry Lewin, Praemium Limited Chairman, said: “This is an exciting opportunity for Powerwrap and Praemium shareholders alike. For many years, Praemium has been on a growth trajectory and has a history of generating profits. Powerwrap shareholders can now gain exposure to Praemium’s strong financial position and advanced technology, to realise compelling benefits via the creation of one of Australia’s leading independent specialist platform providers on a combined FUA basis.”

Praemium intends to lodge a copy of its bidder’s statement with the Australian Securities and Investments Commission (ASIC) and send a copy to the Powerwrap board and the Australian Securities Exchange (ASX) on 16 July 2020.

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Michael Ohanessian

Following its launch 18 months ago the Praemium non-custodial VMA Administration service, has grown to over $6 billion in funds under administration (FUA).

The service was launched to supplement Praemium’s market-leading non-custodial Virtual Managed Account (VMA) solution, currently managing over $100 billion in assets.

Morgan Stanley and Shaw & Partners signed up to the VMA administration service in April 2019 and both of these clients are now live. A total of 10 clients now use the service, comprising over 4,000 portfolios and over $6 billion in FUA. This represents a 15-fold increase since December 2018.

The service offers full administration support and includes mail house, portfolio management and reconciliation of accounts, corporate action elections and processing, billing support and the full annual reporting requirements of our clients.

The administration service is an important addition to Praemium’s Integrated Managed Accounts platform, which offers the most comprehensive range of managed accounts across custodial assets (SMA and IMA*), non-custodial assets (VMA), and the ultimate consolidated reporting view, the Unified Managed Account (UMA).

Praemium CEO Michael Ohanessian stated, “Our Integrated Managed Accounts platform is a game changer in terms of providing transformational efficiencies for advice businesses. Offering admin services for VMA accounts is another step in the evolution of Managed Accounts solutions. It is satisfying to see our deep investment in expanding Praemium’s platform capabilities these past two years also now recognised by the Innovation Award from the Institute of Managed Accounts Professionals (IMAP).

Ohanessian adds “With the ATO reportedly expecting to receive some 20 billion digital transactions in the year ahead, being able to provide clients with fully reconciled portfolios and comprehensive reporting, irrespective of the complexity of the underlying assets, will further simplify the tax reporting burden on advisers and investors. High-quality, accurate reporting will be more critical than ever in this increasingly transparent, digital world.”

*SMA (Separately Managed Account) and IMA (Individually Managed Account).

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Michael Ohanessian

Praemium is delighted to have extended its relationship with Morgan Stanley Wealth Management Australia, to transition 2,500 new portfolios to the Praemium platform, with an incremental contract value of approximately $1 million per annum.

The Praemium integrated Managed Accounts Platform, launched earlier this year, offers adviser groups a one-stop-shop to operate multiple investment approaches, by blending custody and non-custody solutions on a single technology platform. It’s an approach that is seeing increased interest from advisers.

Since 2005, Morgan Stanley have utilised Praemium’s Virtual Managed Account (VMA) non-custodial reporting solution for 2,500 investor portfolios with domestic assets. Under the new agreement a further 2,500 portfolios with international assets will be added over the next 2-3 months. Praemium will also provide portfolio administration and taxation reporting for portfolios with international investments.

Praemium CEO Michael Ohanessian said, “We are delighted to be further extending our long-standing relationship with Morgan Stanley. Having utilised our non-custodial VMA service for over a decade and then expanding last year to include our Separately Managed Account (SMA) custodial platform. From April, Morgan Stanley will also add a range of single investment assets to their menu, enabling them to construct Individually Managed Account (IMA) portfolios that combine SMA models with bespoke investments.

“We are very pleased that our fully integrated Managed Accounts Platform, will enable Morgan Stanley and their advisers to create a streamlined client portfolio experience irrespective of structure.”

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Michael Ohanessian

Praemium is pleased to announce the launch of a major technology upgrade and new rebrand for its global investment platform. With this upgrade, our addressable market in Australia expands from the $62 billion Managed Accounts segment1 to the $860 billion overall platform market2.

Praemium’s unique, integrated platform will deliver the ultimate Unified Managed Accounts (UMA) solution, through the combination of:

•  our existing market-leading Separately Managed Accounts (SMA) solution;
• the significant expansion of our Individually Managed Account (IMA) solution across a wide range of investment assets; and
• our Virtual Managed Account (VMA) reporting solution for non-custodial holdings.

Financial advisers will now have an expanded investment universe of 1,300 domestic and international model portfolios and single investment assets.

Praemium CEO Michael Ohanessian said. “The innovative breakthrough is that we have combined SMAs with bespoke investments in a singular experience. This compares dramatically to traditional wrap platforms that have tried to overlay SMAs into their technical and regulatory architecture. Praemium on the other hand has built ‘wrap-like’ capability into our existing elegant and lean architectural design. Our new Praemium branding underscores the unified nature of our integrated custodial and non-custodial solution across a broad investment universe.

“In addition to new managed accounts options in a single structure and on one integrated technology platform, Praemium has also released a new and intuitive Adviser Portal and dashboard that will save advice businesses time on implementation and administration and enable higher quality client engagement through easy access to rich client portfolio and adviser business information.

“Praemium is now the ultimate one-stop-shop where advisers can operate multiple investment approaches while utilising our unique blend of superior portfolio reporting and rebalancing capabilities. Praemium’s UMA platform is the next-generation solution which provides a unified experience across custodial and non-custodial investment strategies.

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Michael Ohanessian

Praemium has announced that it has signed a 5-year contract with CMC Markets Stockbroking Limited (CMC) to provide Tax Tools, Praemium’s advanced tax reporting solution.

Praemium has been providing Tax Tools since 2008 to a key institutional client at a previous minimum contract value of $1 million per annum.

Under the new Agreement, Praemium will continue to provide tax and CGT optimisation tools for existing Tax Tools users, who will transition to CMC.

These transitioned portfolios will retain the minimum contract value of $1 million per annum over the 5-year term.

Incremental revenue may also be derived from additional portfolios of the transitioned service or from the addition of new CMC white-label clients.

Praemium CEO Michael Ohanessian said, “We are very proud of Tax Tools, which we have provided to many thousands of investors over the past decade. Tax Tools enables investors to consider the tax implications of transactions before they are executed.

Tax Tools users also receive an accurate year-end tax report that covers all ASX-listed plus 4,000 international securities, making year-end tax reporting pain free.

Tax Tools has been a significant differentiator for our clients and we are pleased to be able to extend this service in partnership with CMC.”

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Michael Ohanessian

Praemium is pleased to advise that it has agreed terms with Morgan Stanley Wealth Management Australia to broaden its longstanding relationship to include Managed Accounts.

Praemium’s market-leading SMA technology will provide a completely automated Managed Accounts investment solution, supplementing the existing performance and tax reporting services that Praemium has been providing Morgan Stanley since 2005. The result is a fully integrated platform offering for Morgan Stanley advisers and clients.

Morgan Stanley Wealth Management is a leading wealth management firm in Australia, with $27 billion in assets under management across 110 advisers.

With the Managed Accounts solution live from July 2018, advisers and their clients will have access to specialised investment models across domestic and international investment portfolios through professional investment managers including Alliance Bernstein, BlackRock, Ellerston, Franklin, JOHCM, Legg Mason, Pendal and UBS Asset Management. Many of these models will be exclusive to Morgan Stanley.

‎Morgan Stanley Head of Institutional Equities & Wealth Management Ian Chambers said, “We are delighted to be partnering with Praemium for the launch of our Morgan Stanley SMA offering on our domestic client platform.

A key feature of our independent advice offering is that our clients will have access to leading diversified global investment options. Managed Accounts are becoming an increasingly important part of our financial product suite and we are delighted to offer our clients Praemium’s market-leading managed account platform solution.”

Praemium CEO Michael Ohanessian said, “We are pleased that Morgan Stanley has extended our partnership to include our Managed Accounts technology. It is a tremendous validation of the robustness of our technology and the breadth of our offering that we continue to attract such high-calibre institutional clients.

With some excellent input from our key clients such as Morgan Stanley, we have made great strides in enhancing our market-leading analytics capabilities. Being able to meet the unique needs of institutional clients in a timely and efficient manner sets us apart from our peers. This agreement further affirms our position as the leading Managed Accounts provider in Australia.”

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Michael Ohanessian

Praemium is pleased to announce that JBWere Limited has extended its agreement for Praemium to provide reporting solutions to their wealth management client portfolios for a further 2 years.

The solution, based on Praemium’s portfolio administration and reporting software, has a current annual value in excess of $1 million.

Building on its core functionality for tax reporting, Praemium has released a number of significant enhancements to the platform over the tenure of its partnership with JBWere.

In particular, Performance Reporting and Benchmarking have been expanded to meet the sophisticated needs of institutional clients. The new Report Publisher feature has delivered significant time and cost savings for generating and distributing customised reports for thousands of clients at the end of reporting periods.

Praemium CEO Michael Ohanessian said, “We are delighted that JBWere has chosen to extend its partnership with Praemium. We are committed to simplifying the administration process and delivering greater efficiencies for our clients through our innovative technology. Collaboration with our clients is integral to our product enhancements, evidenced by our ability to attract and retain clients of the calibre of JBWere.”

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Michael Ohanessian

Praemium is pleased to report strong platform inflows in the March 2018 quarter, with combined gross inflows of $671 million, the third highest on record.

FUA for the March quarter of $7.8 billion was up 5.2% on the December quarter of $7.4 billion despite sharp declines in equity markets.

The March 2018 quarter included progress on several strategic initiatives:

• Added 69 new models, an 11% increase, on the Praemium SMA;
• Expanded international models on the Australia SMA with the addition of leading global manager Franklin Templeton;
• Introduced family pricing for the Australia SMA;

Praemium CEO Michael Ohanessian commented, “The March quarter was a tough one for equity markets globally with declining valuations and an increase in volatility. Despite an increase in investor uncertainty, we are pleased that our asset inflows held up and our overall FUA increased 5% over the December quarter.

“For the Australia platform, we are very pleased with the uptake by advisers of our new leading-edge digital acceptance. We have also received positive feedback on family pricing and a number of other key new features released in the quarter. Looking forward, we expect to see considerable interest in the newly launched International SMA. Providing direct holdings for a client’s offshore equity allocation has often been prohibitively expensive compared to using collective structures; however, the efficiency of the Praemium SMA and the fact that we pass on the trade-netting benefits to investors helps make Praemium’s international SMA models economically viable.

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