Lonsec research model to remain

The front-running bidders to acquire Lonsec from Zurich are understood to have indicated they will not be moving to alter the dynamics of Lonsec’s research and ratings division.

Zurich was expected to announce this week the successful bidder for the Lonsec business, which is made up of its largely separate stockbroking and research divisions.

The companies regarded as the front-runners to acquire the Lonsec business are focused on stock-broking, and it is understood they have indicated they would not be looking to alter the highly successful model developed by the research division.

By the end of last week, the companies regarded as front-running in the process were Bell Potter and the IOOF-owned Ord Minnett – neither of which has research capabilities comparable to those of Lonsec.

It is understood that Zurich’s desire to sell the Lonsec business as a complete entity limited the amount of interest from competitor research and ratings houses.

Zurich has, throughout the process, consistently refused to confirm its intention to exit its investment in Lonsec, however the Swiss-based company is understood to have made its decision early this year based on a review of its activities in Australia.

The decision is also believed to be based on Zurich’s perception that the relative performance of the Lonsec business had made it look particularly attractive to potential buyers.

The health of the research arm of the Lonsec business had been indicated by its performances in Money Management’s ‘Rate the Raters’ and ‘Top 100 Dealer Groups’ research.

Over the past three years, Lonsec had emerged as the best-regarded research house by both fund managers and financial planning dealer groups.

Money Management will publish the findings of its latest Rate the Raters survey in next week’s edition.