Eppley triples asset management portfolio
The deal for financial outfit Eppley Limited to manage a real estate fund in Barbados still requires regulatory approval, but is expected to triple Jamaican company's asset management portfolio.
Eppley is buying the unlisted common shares of Fortress Caribbean Property Fund Limited SCC from Fortress Fund Managers and Altman Real Estate.
Eppley managing director Nicholas Scott declined to disclose the value of the transaction, which he expects to close by the end of the first quarter.
The fund's portfolio mainly consists of commercial office and retail properties in Barbados, including important landmark buildings in Bridgetown. It also owns residential properties in St Lucia and Canouan Island in the Grenadines.
Prior to this transaction, Eppley had US$16 million of off-balance sheet assets under management in the Caribbean Mezzanine Fund, a joint-venture with NCB Capital Markets. The Barbados transaction would give it oversight of nearly US$50 million of assets.
"The transaction is an important development for Eppley. It immediately increases our assets under management by the equivalent of approximately US$30 million, significantly increasing the scale of our business," said Scott.
Following the transaction, Eppley will own 100 per cent of the unlisted common shares of Fortress Caribbean, giving it full voting control of the fund, and will assume all investment management and advisory responsibilities for Fortress Caribbean.
Scott says the acquisition will allow Eppley to diversify geographically by broadening its reach across the Caribbean. It also deepens its exposure to real estate.
"Finally, we believe that the transaction provides a strong platform for us to significantly grow our business. We look forward to sharing our plan for the fund with the Jamaican investment community and financial markets in the near future," he said.
Eppley continues to derive most of its earnings from its core proprietary portfolio of credit and real estate assets which it manages for its own account.
Regarding the Fortress properties, Scott said Eppley's team in Jamaica would be complemented by support in Barbados and will make investment decisions on behalf of the fund, under the oversight provide d by its board of directors.
"In addition to our own executives and staff, we have reached an agreement with a local firm to provide additional administrative and other support services," he said.
At the announcement of the deal earlier this month, Fortress indicated that the change in management would allow it Fortress to focus exclusively on its core Caribbean and global fund management business, encompassing 13 other funds and more than 10,000 clients.
It is expected that Fortress will continue to have a representative on the fund's board, while Altman Real Estate will continue to offer services to the fund on a competitive basis.
Fortress Caribbean Property Fund, is a closed-end mutual fund, whose real estate portfolio as of September 2017 was estimated at BD$67.5 million.
" The funds has over 2,000 investors mainly in Barbados, Trinidad and the Eastern Caribbean. These investors own shares that are listed on the Trinidad & Tobago Stock Exchange and the Barbados Stock Exchange. The net asset of the fund belongs to the fund's investors through their ownership of theselisted shares," Scott said.