IOOF makes peace with Perennial Value execs
By Craig Phillips
IOOFhas settled its long running dispute with the management team at Perennial Value Management after striking a deal to give the latter’s executives more control.
The arrangement will see Perennial Value Management retain 60 per cent of the profits from its business, while IOOF, through its 86 per cent stake inPerennial Investment Partners, will receive the remaining 40 per cent share of the profits.
The negotiations on the restructure have been ongoing since last July, when IOOF acquired the shares in Perennial Investment Partners from the boutique fund managers’ executive team for $3.6 million.
As a result, IOOF sold its 55 per cent stake in Perennial Value Management to the group’s executive team for a $2 million profit.
IOOF chairman Ray Schoer says the move will remove any doubts surrounding the boutique fund manager staying with the listed financial services company.
“People like to lock in the management arrangements. We expect now to hold onto John Murray (Perennial managing director) and he was the key person,” he says.
The deal coincides with IOOF unveiling a 125 per cent jump in net profit for the half year ending December 2003, with the recently listed financial services group reporting a net profit of $11.4 million for the six month period.
Revenue during the period was up 44 per cent to $89 million for the half year and funds under administration and advice rose 157 per cent to $13.5 billion.
IOOF group managing director Rob Turner says the company was on target to meet the full year forecasts detailed in its float prospectus issued late last year.
The company predicts a net profit after tax of $22.5 million for the full year and funds under management/advice totalling $13.8 billion.
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