Key among these is a plan to acquire a Hong Kong-based provider of customer relationship management (CRM) technology, WealthCraft Systems Ltd, for A$625,000 ($655,000, £403,000).
According to Præmium executives, the acquisition would enable the company to offer the users of its international wealth management platform the ability to access their client data, planning tools and commission/fee payments on the same platform as the one holding these clients’ investments.
Although this type of facility exists on some onshore UK platforms, it is not believed to exist, at least to the same degree, in the international arena, they said.
John Martin, director of Præmium’s London-based UK and international operations, described the development as “an important milestone” for the company, as this meant that it now could “provide market-leading investment management and portfolio administration services internationally, from [Præmium’s] operational centres in the UK, Australia, Jersey and Hong Kong”.
“WealthCraft’s financial planning tools will complement our existing service, and provide a CRM system to allow advisers to demonstrate traceability in their dealings with investors,” Martin added.
“This will provide a significant advantage [to Præmium’s clients] in Australia, as well as [those catered for] internationally from Jersey.”
Michael Ohanessian, chief executive of Melbourne-based Præmium Ltd, noted that the WealthCraft business would provide a new distribution channel for Præmium’s Jersey-based international platform.
“WealthCraft has a number of important financial advisory clients in the Asia region, and they service the same market that our Jersey-based platform targets,” he said.
A$4.46m capital raising
Præmium announced the WealthCraft acquisition plan this morning to the Australian Securities Exchange, following a trading halt on Monday ahead of the announcement.
Præmium said it would pay for the WealthCraft acquisition in part with A$400,000 it had already set aside in the form of a secured loan for the business, as well as from an A$4.46m capital raising, part of which has already been completed in the form of a private placement of 33m shares that has raised A$2m.
These are expected to be issued on Friday and listed for trading next Monday.
Separately, a fully underwritten rights issue, which would allow investors to apply for one new fully paid ordinary share for every eight shares held at the same prices as the institutional placement price of 6 cents a share, is also planned.
Subject to shareholder approval and “satisfactory completion” of certain conditions specified in the agreement, the acquisition of WealthCraft is expected to complete next month.
The company’s cash resources, after acquisition outlays and underwriting expenses, will be approximately A$8m.
BlackRock SMA
Also today, Præmium said it had agreed to take over a BlackRock separately managed accounts business in Australia that it has been providing technology support for since 2005. The SMA scheme currently has more than A$600m in funds under management across 100 model portfolios, and looked after by more than 20 fund managers, Præmium said in a statement.
This deal was also described by company executives as significant, because, they said, it marked the end of Præmium being “exclusively a software service business in Australia”, as it becomes “the operator as well as technology provider of model-based investment services” in the market.
Among the conditions necessary to be met before the BlackRock SMA acquisition can go ahead is the approval by investors in the SMA who account for at least 50% of the funds under management.
Præmium must also fund certain expenses involved in its taking over as ‘responsible entity’ (RE) of the SMA investment scheme, Præmium said, including regulatory approvals, legal expenses, IT costs, marketing and rebranding, and “certain investor vote-related expenses associated with the change in RE”.
The cost of the BlackRock SMA acquisition brings Præmium’s total outlays to A$1.1m, minus the A$400,000 secured loan to WealthCraft.
Founded in 2003
WealthCraft was founded in 2003. Its key, “cloud-based” CRM product is called WealthCraft 5.0, which is described by Præmium as having been designed for use with Microsoft CRM systems and thus accessible directly from Microsoft Outlook. WealthCraft literature says this "makes advisers immediately comfortable with using it".
Præmium was founded in 2001 by Arthur Naoumidis, and listed on the ASX in May 2006. It opened its London office a month later. It has been increasing its range of services available to clients with international clients, including those with American expatriates on their books.
