ABN Amro to buy into Absolute Capital

ABN Amrois set to take a 50 per cent stake in alternative investment firm Absolute Capital following the pair striking a heads of agreement, which includes plans for the joint-launch of a number of debt products into the market.

Absolute indicated it was in discussions with a major shareholder back in September to bolster and support its alternative debt operations after it bought back one-third of the stake held in it by Swiss firm RMF Investment Group.

“We believe ABN Amro can do a great many things for us and can add value across our business. More than half of our business is now debt orientated and ABN Amro has significant ability in this area,” says Absolute Capital group managing director Deon Joubert.

“It’s not really a financially motivated development it’s more a case of being able to provide both institutional and retail investors with a high level of confidence in the continuity of our business and products.”

Joubert says the first benefit for Absolute Capital will be one of reputation, given ABN’s global branding. However he adds that the two will combine to launch a series of debt products into the market, although the badging etc. of such offerings is unclear at this stage.

ABN Amro Australia head of financial markets, Col McKeith, says Absolute Capital is a strong strategic fit for the group.

“There is strong demand among investors, particularly retail investors, for high yield products. Absolute Capital’s ability to structure and package debt, equity and hybrid products is a natural fit with the retail distribution platforms of ABN Amro Morgans Australia and ABN Amro Craigs New Zealand,” McKeith says.