Clime seeks to boost profitability with TIP tie-up

Clime-Investment-Management/Madison-Financial-Group/

29 December 2023
| By Laura Dew |
image
image image
expand image

Clime Investment Management has entered into negotiations about a strategic business alliance with listed investment house Teaminvest Private Group (TIP) in a move to return the firm to profitability.
 

This is proposed to include the acquisition of Adelaide-based wealth advisory business Enva Group from TIP, the joint establishment of an equity research offering as a new revenue stream and access to TIP’s managed wholesale and private equity investments for investors. 
 

Regarding the Madison Financial Group, the deal would provide corporate advisory support and bring it into a structure with greater adviser equity participation and profit upside.
 

Clime will place 4.5 million shares to TIP to raise $1.35 million to be completed on 10 January 2024.
 

A statement on the ASX on 29 December said: “TIP is a listed investment house with direct investments in private equity, funds management and corporate advice. Like Clime, TIP has a long heritage focused on education and value investing.
 

“Both Clime and TIP utilise proprietary fundamental analysis to identify attractive investments across multiple asset classes and together cover the full spectrum of traditional investments.
 

“The directors believe the two companies are culturally aligned, both with a heritage of self-directed investors.”  
 

Upon successful completion, TIP chief executive, Andrew Coleman, will join the board of Clime.
 

The two firms have already worked together – in August, the two companies partnered to establish online financial education program My Financial Fitness which is due to be released in the first quarter of 2024.
 

Clime is hopeful the deal will boost its profitability as the firm’s FY23 results reported a full-year statutory loss of $2.3 million compared to a profit of $0.2 million in the previous year.
 

Chairman John Abernathy attributed this to factors including a greater reset of the business than had been envisaged, greater than expected business costs and a challenging advisory landscape.
 

“Our industry has a high and growing fixed cost element that requires providers to constantly reset their operational focus or achieve scale and profitability,” he said in August. 
 

“Our drive for product excellence and scale is weighed against the increasing complexities of running multiple businesses and a tough competitive landscape. The ‘road to scale’ requires many adjustments to business strategy, often weighing between organic and inorganic sources of growth.”
 

Shares have also fallen 32 per cent since the start of 2023, making Clime one of the worst-performing fund managers this year.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 2 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 3 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

6 days 21 hours ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

1 week 5 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

2 weeks 3 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND