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Craigs Investment Partners 2013 profit more than triples to record, led by brokerage

Craigs Investment Partners, the brokerage owned by its executives and Deutsche Bank, more than tripled profit in 2013 as a boom year for share sales drew investors back to the market and lifted the firm's funds under management.

Profit rose to a record $17.8 million in calendar 2013, from $5.7 million a year earlier, according to the Tauranga-based company's annual report. Sales jumped 46 percent to $109 million. The company paid dividends of $15.41 per qualifying share, or $12.3 million for 2013, almost quadruple its 2012 payment of $3.97 a share, or $3.2 million.

There were 10 new listings on the New Zealand stock exchange last year, with initial public offerings at a nine-year high and some $7.5 billion of new capital listed, according to NZX data. Cash trading activity also surged, with the total value up about 40 percent to$42.3 billion and the volume of trades up 32 percent to 1.19 million.

Craigs's share of equity market transactions last year included lead manager for the $1.88 billion Meridian Energy IPO and Z Energy's $840 million sale, as well as SLI Systems's IPO, Veritas's reverse listing of Mad Butcher. It was bookrunner for Quadrant Private Equity's sale of its Summerset Group stake and News Ltd's exit from Sky Network Television, for which it was also underwriter. It advised and managed bond sales for clients including Genesis Energy.

Revenue growth in 2013 was driven by brokerage, which rose 53 percent to $40.3 million, while fees climbed 37 percent to $54 million and commissions jumped 67 percent to $13.9 million. The firm now has about $8.5 billion in funds under management, which chairman Neil Craig says underpins the business.

"All parts of the business performed extremely well - there were no laggards and no extraordinary costs," Craig told BusinessDesk. The 2014 year was shaping up as "another reasonably good year" although profit was unlikely to top last year's record, he said.

IPOs and placements last year helped stoke secondary market activity, he said.

Operating expenses in the year rose about 28 percent to $85.6 million, led by a 36 percent increase in employee benefits to $60.9 million.

Key managers at Craigs are shareholders of CIP Holdings, which owns 50.1 percent of the company Deutsche Bank acquired its 49.9 percent holding in the company in August 2010. Craigs has 798,437 shares on issue.

(BusinessDesk)

Comments and questions
4

How are the CIP kiwisaver funds performing? One would hope that the rate of growth of their unit prices has likewise tripled leaving everyone happy :)

Well the NZ, Australian and global equities KiwiSaver funds failed to beat their benchmarks. They may be good at research but they are hopeless are funds management.

I remember there was once a book about share brokers called "Where are the client's boats?", in relation to Wall Street types showing off their latest launches and yachts. Let's hope that Craigs' investors are similarly growing in wealth as Craig's brokers are.

Better to have a local firm (even if half locally owned) creaming it than offshore (a la Goldies)

I'd have a grin like neil if i had 17m too