Sterling to float shares in start-up investment company

Marcella Scarlett, Business Reporter

Sterling Investment Limited (SIL), a new company affiliated with Sterling Asset Management, plans to float its shares on the market and list on the Jamaica Stock Exchange (JSE), according to Marion Ross.

Sterling Investment is a stand-alone company incorporated in December 2012 in St Lucia.

The shareholders were not immediately available, but Charles Ross, the prinicipal shareholder of Sterling Asset Management, said SIL's directors comprised himself, Maxim Rochester, Derrick Jones, and an unnamed attorney said to represent the law firm McNamara and Company of St Lucia.

Marion Ross, the business deve-lopment officer and shareholder of Sterling Asset, said the float would be done "as soon as is feasible".

"We are going to be selling shares in the company. The share capital is denominated in Jamaican dollars, but the underlying assets are denominated in US dollars," Ross said Monday.

PRIVATE PLACEMENT

Charles Ross, who is Marion's father and boss, said the company would first be doing a private placement, scheduled for November, and that JSE rules required that at least six months must elapse between a private placement and a float on the exchange.

The majority of Sterling Investment's holdings, 85 per cent, are USD fixed-income instruments issued by investment grade corporations or governments across developed markets, said Ross, who said the strategy is a hedge against depreciation and inflation.

The assets have coupons ranging from 6.125 per cent to 12.5 per cent.

Additionally, 11 per cent of the company's assets are tied up in real estate via investment in a condominium development in St Kitts, from which Ross said the expected return on investment is about 22 per cent per annum over a three-year period.

Ross said SIL had acquired shares in the company executing the real estate development, which he said is due to be completed in 2015. In return, it has rights to some of the condo units.

Marion said Sterling was already negotiating the sale of the condo units to be owned by SIL but did not disclose the size of the project or the number of units due to SIL.

Sterling Asset is SIL's investment manager and is responsible for buying and selling the underlying assets in the company.

"Persons who buy into Sterling Investment Limited will have access to the investment strategy of Sterling Asset Management Limited," Ross told Wednesday Business.

SIL's business model is the purchase and sale of securities. The company, Marion said, would own the securities outright and then sell when there is a demand for the assets.

"In theory, SIL works like a mutual fund, but it is not a mutual fund, it is a company," said Ross.

Its target market is long-term investors, specifically pension funds, retirees, or soon to be retirees.

"Sterling Asset Management has generated an average annual return of 15 per cent on its USD offshore portfolio for the past 10 years," said Marion.

"A similar investment strategy is being pursued with Sterling Investment Limited within a vehicle that is available to a wider group of investors, especially pension funds."

SIL's capital is estimated at US$3 million, and its assets at US$4 million, Ross told Wednesday Business.

marcella.scarlett@gleanerjm.com