New $112 million investment bank

Friday 8th December 2000

By Campbell McIlroy

Wellington's Strategic Investment Group and Auckland's Salisbury Group have merged to create a $112 million investment bank with ambitions of becoming a dominant player in commercial property financing.

The new investment bank, Strategic Investment Group, will operate three wholly owned subsidiaries specialising in capital investment, corporate advisory and finance.

The subsidiaries will be known as Strategic Capital, Strategic Investment Group, and Strategic Finance.

The merger, effective from December 1, equally splits the shareholding in the new company among its six directors, three from each company.

They are Paul Bublitz, John Pendergrast and former All Black captain Jock Hobbs from Strategic, and Graham Jackson, Brian Fitzgerald and Marc Lindale from Salisbury.

Mr Bublitz and Mr Jackson will be joint managing directors.

Mr Bublitz said the merger, which the companies had been working on for the last two to three months, came as a result of work on Auckland's Princes Wharf development.

Mr Jackson said the two companies realised from the financing side of the business there were areas of synergy.

"We got to a size where we had to decide whether to take the foot off the accelerator and settle where we were or look at how we could move ahead," Mr Jackson said.

Salisbury's investment banking activities would operate as a wholly owned subsidiary of Strategic Capital while its mezzanine finance business would become a wholly owned subsidiary of Strategic Finance.

Mr Bublitz said the merger would also strengthen Strategic Mortgages, which SFL and Bank of New Zealand established early this year as a jointly funded first-mortgage lending company. In less than three months it completed over $62 million worth of commercial loans.

Salisbury is probably best known for raising finance facilities of over $230 million for the Prince's Wharf development.

The company also advised Ericsson Communications in the divestment of Ericsson Cellular to Telecom, as well as Wel Energy Trust over its $112 million controlling shareholding in the Wel Energy Group.

It was also commercial adviser to the Hutt Mana Energy Trust during its strategic investment in Natural Gas Corporation through a $100 million TransAlta share and notes swap.

Mr Jackson said there were definite plans to expand the business advisory side of the business and the company would look to employ two or three more staff to make sure it was adequately resourced.

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