Proven acquires Heritage education fund
Armed with US$30 million in fresh cash from its recent additional share offer, Proven Investments Limited has stepped up its Caribbean build-out of portfolio companies with the outright purchase of Heritage Education Funds International Inc....
Armed with US$30 million in fresh cash from its recent additional share offer, Proven Investments Limited has stepped up its Caribbean build-out of portfolio companies with the outright purchase of Heritage Education Funds International Inc.
Heritage manages some US$150 million worth of education savings plans for clients in Jamaica, Bermuda, The Bahamas and the British Virgin Islands.
Additional potential acquisitions outside Jamaica but within the Caribbean are said to be in the Proven M&A pipeline, with the possibility of being wrapped up this year. The latest purchase agreement is with Knowledge First Foundation, the parent company of Knowledge First Financial Inc, said in a statement by Proven to be Canada’s largest registered education savings plan company.
Proven CEO Christopher Williams, while declining to disclose the acquisition cost, says the purchase provides another service to be offered to the company’s wealth management clients, many of whom have education for their children as a specific saving and investment goal.
“The Heritage platform is a very practical and achievable wealth product that allows the individual the opportunity to save and provide education for their children in the future,” he said.
Once the deal clears regulatory hurdles, the new asset will give Proven a presence in The Bahamas, where it does not now operate.
A decision has not been taken yet, Williams told the Financial Gleaner in an interview on Thursday, on the range of products and services that Proven may market in that Caribbean country.
“We have a strategy to build out a banking and wealth platform across the Caribbean. It certainly gives us a foothold in The Bahamas,” he said.
The investment company has businesses in the other three Caribbean countries where Heritage sells its product.
Proven holds stakes in Boslil Bank in St Lucia, with offices in Panama and Uruguay; Fidelity Bank in the Cayman Islands, the latter being an acquisition still to close; and operates wealth management firm International Financial Planning (Cayman) Limited in Cayman and the British Virgin Islands. Proven also owns 20 per cent of Jamaican JMMB Group and 25 per cent of microcredit company Access Financial Services.
Heritage is said to have amassed, since it began operations in 1983, a customer base of 50,000 across the Caribbean territories, with the bulk of its business being in Jamaica.
“We strongly believe that this transaction will help Heritage International Scholarship Trust Plans thrive and grow within the Caribbean region, with a local and experienced wealth management leader at the helm, while allowing for focus and pace on advancing our Canadian strategies at home,” said President and CEO of Knowledge First Foundation and Knowledge First Financial Inc Carrie Russell in a joint release on the deal with Proven.
Proven will not be the immediate direct managers of Heritage’s education funds at the point of acquisition, Williams noted, as the funds are now invested and managed by a third party – a Canada-based investment subsidiary of Scotiabank. The arrangement is expected to remain in place on acquisition, he affirmed.
The acquisition of Heritage Education Funds International is the latest indication of an increasingly aggressive acquisition stance by Proven, whose recent deals include a 50.5 per cent acquisition of Roberts Manufacturing Company Limited of Barbados and a 10 per cent stake in Fidelity Bank.
Williams says that through subsidiary Proven REIT, the company was also looking to do more real estate deals soon in The Bahamas and Guyana. Both prospects were still going through internal reviews, he said.
“We see ourselves as a Caribbean company and our interests are not only in financial services, but also the real sector and real estate, with several real estate projects being implemented in Jamaica and Cayman,” Williams noted.
The COVID-19 pandemic, he added, has not dampened the firm’s investment appetite. Rather, Proven was strategising in anticipation of a major post-pandemic performance uptick, he said.