Richard Powell, CEO of VMBS. - File

Victoria Mutual Building Society (VMBS), which has been busy attempting to transform itself from a mortgage bank to a broad-based financial services company, yesterday acquired 20 per cent of Prime Asset Management, the pension funds managers controlled by the privately held ICD Group.

Both sides confirmed the deal, but declined to disclose how much VMBS paid for a stake in the company which has more than $20 billion (US$250 million) under management.

There were hints, however, that it might not have been entirely a cash transaction, although it was not immediately clear how the deal might have been structured.

Acquisition hailed

However, VMBS's CEO, Richard Powell, hailed the acquisition as an opportunity for his mutual company - which at the end of its last financial year, had assets of $44 billion and profits of $470 million - "to diversify its product portfolio" even further as part of its strategic development plan.

The deal requires approval from the Financial Services Commission (FSC), which regulates pension managers and equity securities companies.

"As soon as approval is received ... VMBs will be able to offer individual retirement accounts (IRAs), which is a very attractive pension product to self-employed persons and contract employees who are not already covered under an approved pension plan," Powell said in a statement.

Joseph M. Matalon, who controls the ICD Group, told the Financial Gleaner that the deal will allow "both parties to leverage their strengths".

One way that this is likely to materialise early will be use of the 15 VMBS branches as well as representative offices in Britain, the United States and Canada to market the kind of products that Prime will have for over-the-counter sale.

"They recognised what we have done in the market-place and that Prime is not associated with anyone in the market," said Matalon. "These help to make us a good fit."

business@gleanerjm.com