Sterling taps into 'Investment for Citizenship' market through condo project
Avia Collinder, Business Reporter
Sterling Investments Limited (SIL) says it has invested 7.5 per cent of its growing private equity portfolio in a condominium development in St Kitts and Nevis targeted at subscribers to that country's Citizenship by Investment Programme.
The company has purchased preference shares in Pelican Bay Limited (PBL) on which it earns 8 per cent per year. PBL is the main investor in the condominium complex.
The citizenship programme requires foreigners to invest capital of US$400,000 to qualify.
Sterling's business development manager, Marion Ross, said the complex at Pelican Bay comprises 226 units, but declined to state the unit prices.
She said Sterling Asset Management Limited (SAM) was the arranger of financing for the real estate project into which SIL has poured $55.9 million.
Jamaican construction company, Surrey Paving, is the contractor on the project as well as an investor in PBL, said Ross.
Sterling Investments, which was incorporated in 2012, will list by introduction on October 13 at $134 per share, said Ross, relative to its book value of $138 per share.
The majority of the shareholders in SIL are pension funds, retirees and individual local equity investors; its board is chaired by Derrick Jones, while the other directors are Michael Bernard, Max Rochester and Charles Ross.
Charles is also the head of Sterling Asset Management, which acts as investment manager for SIL.
"SAM and SIL are distinct corporate entities. SIL has an independent board of directors that monitors the actions of the investment manager," said Marion.
Last December, Sterling Investments sold additional shares to existing shareholders and others, raising J$168 million, which Charles Ross later said was intended to take the company up to the 100 shareholder minimum required by the Jamaica Stock Exchange.
Marion, noting that the company was "committed to future capital raises in order to give other institutional and individual investors an opportunity to take advantage of the investment," said another rights issue was pending, but the date is still to be finalised.
Company documents state that SIL is 92 per cent invested in US dollar assets, that the company generates revenue from interest income from securities in the portfolio, and through capital gains realised from increases in the price of the securities.
SIL released its audited 16-month results ending December 2013, which put the company's revenue at $70 million, $37 million of which were realised from foreign exchange gains. Profit for the same period was $46 million.
Its assets of $492 million at December are projected to have reached $737 million at June 2014.
For the year 2013, the company said it paid dividend of $2.96 per share, totalling $7.912 million for a dividend yield of approximately three per cent.
Marion said the proposed dividend policy for SIL on listing is 30 per cent of annual profit.