National Bank sees $65 million win on its bet on a 5-year-old firm
National Bank three-month chart
National Bank of Canada says it expects to show a pre-tax gain of about $65 million on the sale of most of its dominant stake in a young New York specialty investment shop.
The Montreal-based bank said Tuesday it will retain a 10.5 per cent interest in Asset Management Finance Corp., which provides capital to investment managers in return for non-voting interests in future revenues.
The buyer, Credit Suisse Group of Zurich, said it is getting more than 80 per cent in return for newly issued Credit Suisse shares worth $384 million US.
That suggests a total value approaching $500 million Cdn for a five-year-old firm. Asset Management Finance, founded in 2003, has completed 12 transactions so far, Credit Suisse said.
Its clients are firms that control billions of dollars worth of assets in such fields as emerging markets, large- and small-cap stocks, real estate, currency, timber and wealth management, the Swiss bank said. The clients need money for management buyouts, owner cashouts, internal share transfers and other reasons, it said.
It quoted Asset Management Finance's CEO, Norton Reame, as saying: "AMF has made great strides in its first five years, and this is an exciting new stage in our evolution. Having Credit Suisse as a partner will bring global resources and scale to AMF and its partner firms and we are excited to be associated with this world-class organization."
National Bank held its stake through the U.S merchant banking division of its investment subsidiary, National Bank Financial.
The prospect of a $65-million gain — a fraction of the bank's 2007 profit of $933 million — did not appear to excite investors. National's share price was down 86 cents at $46.66 in afternoon trading on the Toronto Stock Exchange.
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