Patersons Securities Limited has announced plans to establish a funds management division, joining other stockbroking firms such as Euroz Securities and Argonaut Securities in making this move.
Other brokers to have established a funds management business include former Hartley Poynton investment investor Grame Yukich, who established Entrust in 2004, and Bell Potter Securities pair Romano Sala Tenna and Brad Shalard, who floated Katana Capital in 2005.
Patersons has recruited Lehman Brothers executive Howard Knight to run its asset management business, which plans to offer a range of managed investment products to institutional, wholesale and retail investors.
Among the first funds will be the 80:20 Fund, a wholesale and retail fund with a majority focus on ASX200 stocks but with a mandate to invest up to 20% of assets in special situations and value stocks outside the index.
Patersons Executive Chairman Michael Manford said the new division was an exciting initiative that was a logical extension of the firm's existing funds management activities.
"Patersons already has more than $1 billion in funds under management and administration, with strong growth expected in FY08 and beyond," said Mr Manford.
"We see Patersons Asset Management as a logical extension of our existing activities in the area and an important part of our wider growth program.
"Funds management also adds an additional pillar to the Patersons business and provides an additional avenue through which to further grow our national group and add value and opportunity for our 100,000 strong client base."
Mr Knight said Patersons Asset Management planned to build a substantial asset management business around funds targeted at institutional, professional and retail investors in Australia and overseas.
"Our first fund is the 80:20 Fund, which will be our flagship equity fund combining the strength of Patersons' award-winning equity research team in the mid-cap industrial and resource space with selective investment in opportunities arising from Patersons' corporate finance activities," he said.
Mr Knight said Patersons Asset Management would also offer structured products that targeted the investment needs and interests of the Asian investor market.
Patersons Asset Management will launch its initial fund in January 2008.
