CBA sells stake in Ipac
The Commonwealth Bank has sold its 50 per cent stake in Ipac Securities to a combination of Ipac directors and UBS Capital.
Ipac directors were able to buy back the 50 per cent share held by the Commonwealth after forging a new partnership with UBS Capital.
Ipac chief executive Peeyush Gupta says UBS now holds a 30 per cent stake in the financial planning and master trust business and has representation on the group's board.
Commonwealth Bank head of Australian financial services John Mulcahy says the decision to sell its share of Ipac - which it had held since 1997 - back to Ipac directors was mutual.
"We've had a very successful relationship with Ipac so far. We had a strategic review recently and decided ownership wasn't critical for us," Mulcahy says.
Gupta says the decision was "entirely amicable". He says both parties considered the strategic rationale for continuing with the ownership arrangement in the commercial relationship, and it was agreed that both parties had diverged somewhat over time.
"In a sense, we are parallel but different," Gupta says.
The business relationship between the two stakeholders since 1997 was one based on Ipac providing the CBA with assistance in development of the bank's financial planning arm. Gupta says this essentially involved Ipac providing CBA with its own unique financial planning business model. This meant advisers at the Commonwealth harnessed the techniques and strategy developed by Ipac for its own advisers.
Ipac's commercial relationship with CBA will continue as before without Commonwealth as a stakeholder. Mulcahy says Ipac will continue to distribute products from Commonwealth and Colonial First State through its master trust facility.
UBS Capital executive director David Jones says the new stake in Ipac will be finalised at the end of June, but ends a long process of talks and negotiations which began in September last year. He says Ipac identified a like-minded player in UBS and approached them last year after it had begun discussions with the Commonwealth about the possibility of buying its stake back from the CBA.
"We believe we bring a refocus to Ipac and a new set of skills, such as acquisition transactional sort of skills, and adding to Ipac's organic growth rate with this sort of expertise we've developed in our background in private equity," Jones says.
"We're experienced in accelerating fast growing companies such as Ipac."
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