Victoria Mutual Building Society is buying 82 per cent of Prime Pensions St Lucia, the holding company for Prime Asset Management Limited, which will give it full control of the pension fund management company.
The deal reached with majority partner ICD Group is still subject to regulatory approval by the Bank of Jamaica.
Victoria Mutual previously acquired 18 per cent of Prime Asset from ICD in 2008.
VMBS President and CEO Richard Powell declined to disclose the terms of the deal on Friday ahead of BOJ's nod of approval but confirmed that Prime now has approximately J$21 billion under management on behalf of more 8,000 plan members.
The private pension market was last valued at J$288 billion with 82,071 active members, which would give Prime Asset approximately seven per cent market share. It's the fifth-largest pension fund manager in Jamaica.
Rezworth Burchenson, who has run the company since March 2006, will remain as managing director under VMBS ownership. Prime Asset will also retain its current identity inside the group.
no disturbance to management
Burchenson as well as ICD Chairman Joseph M. Matalon, Allan Lewis, Herbert Hall and VMBS President and CEO Richard Powell are expected to remain as directors on the new board of Prime Asset but Powell said other additions will be made later. Hall is the current chairman.
The acquisition was disclosed in a notice to Prime Assets shareholders dated February 4.
"While these changes will impact the shareholder composition of the company, we would like to assure you that there will be no disturbance to the management team, led by our CEO Rezworth Burchenson, who will continue to provide you with first-class service and sound investment/pension administration expertise," it said.
Powell said the acquisition will be a straight cash transaction. The purchase he said aligns with VMBS's goal of offering a full suite of products and services to members to align with their financial needs - or as he put it, "that tracks with the life cycle" of members.
Pension savings fit neatly into that package, he said.
"Persons have to be concerned about retirement."
VMBS's main business is mortgage lending, but the company also has subsidiaries in insurance, property services, money tranfser services, and securities dealership.
The Prime Asset acquisition is an opportunity for the group to rebalance revenue away from repos and towards fee-based income, a path that financial firms have been trodding over the past three to four years in a bid to shed risk from their balance sheets. VM group is capitalised at about J$11 billion and has an asset base of J$80 billion.
The J$21 billion managed by Prime Asset - which are off-balance sheet funds - won't mitigate the group's existing balance sheet risk exposure, said Powell, but it will give the company a new fee-based business.