Sparinvest seeks to double SP volumes with bid for Garanti Invest

Sparinvest has placed a bid to buy Garanti Invest, which the Danish owned international asset manager would take over as a wholly-owned subsidiary. The plan is to continue with the company as an independent brand – an offer that promises advantages to both parties and has been welcomed by Garanti Invest’s management.

Sparinvest holds a very strong position in the Danish market with a very long relationship with local and regional banks, but also to institutional investors, said Thomas Valentiner, deputy chief executive at Garanti Invest. In addition, it has foreign activities centred on Luxembourg and Sweden, he said.

“Their product range consists of funds (investment funds and SICAV) and thus complements our range of structured products perfectly,” said Valentiner. “It allows us to develop products jointly with alternative pay-offs tailored to specific needs and where the wrapper can be customised. Generally, it will strengthen our position in the Danish market, particularly in relation to competing providers.”

Sparinvest, which wants to strengthen its position in specialised and flexible investment products, issued a press release yesterday, stating it had made an offer to Garanti Invest because of its great potential in its set-up, expertise and products. “Structured products are an area of growth, and Garanti Invest has built up a great history with its guaranteed bonds since 1998. We believe that, together, we can double our growth within five years,” said Per Noesgaard, managing director of Sparinvest.

Gert Thougaard, a director at Garanti Invest is also in favour of the plans, which means that Garanti Invest will largely continue with an unchanged product range, staff and directors, and has recommended to shareholders that they accept the offer before the January 23, 2015 deadline.

“Since 1998, we have done very well as a smaller, independent organiser of structured products, but we also feel that the time has come to be a part of something bigger… I am confident that together we could create a number of synergies and lift the market for guaranteed bonds considerably,” stated Thougaard.

The retail market in Denmark would be one area where a merger would be beneficial, according to Noesgaard. “One of the key goals for us is to ensure that our customers get the investment wrapper that best suits them, said Noesgaard. “With Garanti Invest we can also wrap a portfolio as a structured product, and when you compare it with the set-up we already offer through our existing platform at home and our Sicav platform in Luxembourg, we would be one of the most flexible providers of investment products in Europe,” he said.

“I have great respect for the work, the staff, and the management of Garanti Invest: they have managed to build a strong brand and a good name that we want to build on. Garanti Invest is a well-oiled machine, and I see no reason to change that,” said Noesgaard.

Sparinvest was founded in 1968 as a Danish investment fund, but has since grown into an international asset manager with operations in 14 European countries. It has a broad ownership of more than 80 banks, pension funds and insurance companies. The group manages a total capital of over DKK72bn (€9.7bn) for more than 170,000 private and institutional investors in Denmark and abroad.

Garanti Invest is owned by 38 Danish saving banks, of which many are also part of Sparinvest’s ownership banks. Garanti Invest has arranged the issuance of a total of 106 structured bonds with a total sales volume of more than DKK16bn (€2.2bn).

As part of the acquisition, the board of Sparinvest recommends that the president of Garanti Invest and director of Middelfart Savings Bank, Martin Nørholm Baltser, joins its board of the group.

The Danish structured products market last year reached its lowest levels since 2002, with 37 products worth DKK5.42bn (44 worth DKK5.49bn including flow products) issued, a fall from 39 worth DKK6.9bn (53 worth DKK7.24bn including flow) in 2013, according to SRP data.

Industry Insights

Data Insights

Webinars

Special Reports

Market

Sparinvest seeks to double SP volumes with bid for Garanti Invest