Ashford W. Meikle, Staff Reporter
ROSS
In four years, Sterling Asset Management has grown its funds under management from $257 million to $3.9 billion, a 15-fold increase, and has announced plans to introduce a new equity fund and to push its products within the region before the end of the year as it hunts new revenue streams.
Shareholder's equity grew 11-fold, rocketing up from $16.25 million in 2002 to $187 million in 2005, resulting from a plough back of profits by Sterling's directors into the company.
"Last year we capitalised about $100 million of our retained earnings into permanent capital and we plan to capitalise the retained earnings or part of the retained earnings to boost the share capital," said Charles Ross, managing director.
In six months, Sterling will introduce its global bond fund into the Eastern Caribbean and also plans to set up office within an unnamed regional country. It was unclear whether both events would happen simultaneously.
"We think the markets — certainly in Trinidad and, to a lesser extent, Barbados — have very well - developed mutual fund and unit trust products," said Ross.
Sterling is a lot more wary of the bearish Jamaican stock market, saying its plans to list on the local exchange were still on hold for now, in a statement on the five year-old company's performance.
Market timing is crucial
"Market timing is crucial, and now is not a good time for issues as investors are still reeling from a depressed market and recent failures in public offerings," said Mildred Moss, chief operating officer.
One of the more spectacular flops was the Supreme Ventures IPO, which sold at $4.81 per share, with few takers. The stock hit a low of $1.80 and last sold at $1.83.
The market itself is trading at two-year lows, with the broad JSE index dipping to 83,259 points in trading Monday.
Sterling's decision to tap into the regional market follows a trend which has seen Jamaican finance companies either setting up shop or forming strategic alliances with other players, the latest being investment bankers Dehring, Bunting and Golding which opened a branch earlier this year in Trinidad and Tobago.
The intention is to target high net worth individuals in these countries, a fact Ross freely acknowledged.
"Those markets have lots of money," he said.
"The people are looking to invest and we think our bond fund with its high yield will be attractive. "It had a rough year in the last year because of the high interest rate," he said, "but when you look at the average return over the three year period, it was 13 to 14 per cent, tax-free."
Sterling plans to roll out the product initially in Trinidad but Ross would not give much details except to say that "to register down there you have to have a local agent, and then we'll take it from there."
Competitive market
Ross attributes the virtual explosion in Sterling's assets, despite a crowded and competitive market, to careful targeting of clients.
"When we came into the market, there were a number of large players and we didn't see ourselves being able to compete with them for the mass market," he said.
"But we also felt that there was a substantial bloc of people who were looking for medium to long-term investments and were not just looking for a 30-day repo, and that's the market we went after."
