“We were able to negotiate what we thought was a fair price for the business and so we decided to sell,”Jeffrey Mack, chief executive officer of the GHL Group

In an earlier report last month, Jeffrey Mack, chief executive officer of the GHL Group, said GAM Jamaica will be downscaled to a department and merged with the operations of Guardian Life Ltd, once it finalises the deal to sell a portion of the investment house’s portfolio to Proven Investment Ltd. Mack said the changes will not disturb Guardian Asset’s Trinidad operations, where it will continue as a stand-alone company. “Guardian Asset Management grew out of the investment department of Guardian Life, so we are actually going back to that old model where we have an investment department,” Mack said. The deal with Proven will see GAM disposing of 25 per cent of its business, comprising non-proprietary or third-party funds under management. The other 75 per cent, which Mack said were funds managed on behalf of two other Jamaican subsidiaries —Guardian Life and West Indies Alliance—will still be managed by the retrenched asset management division. Mack said the deal with Proven—a Jamaican operation in the business of asset acquisitions—was an opportunistic one for his company.

The sale is expected to be wrapped up by this month. “One of our three core businesses is asset management and our asset management business in T&T and here in Jamaica are two different business models,” Mack said. “The asset management business in T&T is the classic asset management business where we advise high net-worth individuals, we sell products to retail customers like mutual fund to help them accumulate and manage their wealth. It’s a trading business, where they trade in repurchase agreements; and the repurchase agreements centre on Government of Jamaica bonds,” Mack said of the Jamaica operation. Likening the situation to lending out the company’s balance sheet for a trade margin, Mack said the insurance-sector regulator, the Financial Services Commission, has been discouraging reliance on this type of business activity. “We were able to negotiate what we thought was a fair price for the business and so we decided to sell,” Mack said.

http://guardian.co.tt/business/business/2010/08/11/ifc-deal-gam-jamaica-sale-top-ghl-s-agenda