Archive | Triumph

Strategic founders get back to dealmaking & structures

Published 6 February 2009

The 3 founders of the business that grew into Strategic Finance Ltd have picked up the pieces and started a new company, Triumph Finance Ltd, while they continue to work on the Strategic wind-down.


It will be a return to their roots for Graham Jackson, who formed Salisbury Capital in 1997 and brought Brian Fitzgerald & Marc Lindale in as directors in 2000.


“We don’t want to run a finance company – that’s why we sold Strategic,” Mr Lindale said this week. “We’ll go back to dealmaking, structures, brokering. Our new business is not about employing capital. It’s about employing expertise & knowledge & great relationships.


“At the right level there are deals. Based on fundamentals now, you go in at the right level you can be showing 1½-2 times interest cover, which banks have been hoping to get for years. But they’ve been getting 1-1.2x.”


The company that fired in the world of property finance was Strategic, formed in 2001 with former All Black captain (and now Rugby Union chairman) Jock Hobbs as chief executive.


Strategic Finance Group grew into a $400 million company in 2005 and a $500 million company in 2006, when the Sydney-based Allco Finance Group bought 50% of it. In 2007 Strategic was a $700 million company and fully owned by Allco – but with the New Zealand vendors of the business tied into Allco through share swaps.


And then came 2008, when Allco collapsed and the New Zealanders worked on an unsuccessful buyout of the trading company, Strategic Finance. 3 days before Christmas, Strategic’s stock, deposit a& subordinated noteholders voted overwhelmingly in favour of a 5-year moratorium on repayments.


By the time the moratorium vote was confirmed, the 3 Salisbury founders had themselves a new business – but, Mr Lindale said this week, still with serious obligations to the Strategic investors.


“Basically we’ve got to make some money in a bad market. We’ve got a few dollars left from the carnage of last year. It’s all property-related stuff – a bit of equity, investment, mezzanine funding, and all our old clients are still there wanting to do deals.”


Mr Lindale said he was still contracting to Strategic for 2 days a week. “I ripped the contract up, said there’s no use paying me when there’s nothing to do, but there are issues to work through and the book’s still half a billion dollars.


“We’ve been making some deals, getting a few runs on the board. It’s a different approach to it. We’ve been working on plans, unwinding things, all that.”


Mr Jackson has a separate portfolio of investments and Mr Fitzgerald, who pulled out of direct Strategic involvement at an early stage but remained a consultant, built up a wide portfolio of property and business interests, many with Mr Lindale, including a number of businesses and assets on Princes Wharf.


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Attribution: Interview, story written by Bob Dey for the Bob Dey Property Report.

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