Money Advice Group secures £10million from PNC - bdaily.co.uk
Money Advice Group, one of the UK’s leading financial solutions companies, is embarking on a comprehensive growth strategy after securing an asset based lending facility worth £10 million, with PNC Business Credit.
In conjunction with, Dow Schofield Watts, Money Advice Group negotiated the credit facility to enable continued growth through a combination of working capital funding and finance for acquisitions.
Boasting a solid 10-year heritage, Money Advice Group currently holds approximately 8% market share of the fee charging financial solutions industry, with a turnover of £15million. Handling £250million of consumer debt, the financial solutions company has 28,000 clients that it hopes to grow by a third, with the help of the cash reserve from PNC.
Money Advice Group’s expansion plans have been stimulated by increased attention from the Office of Fair Trading (OFT), resulting in a compliance review in 2011, which saw a significant number of debt management companies either voluntarily exit the market or be forced to close due to lack of compliance. No longer open to flexible and often lax regulations, the debt management industry is now governed by the OFT’s more stringent ‘Debt Management Guidance’ published in March 2012 – and the enforcement of such has led to an industry trend of consolidation. This has created significant opportunities within the industry for larger players, with the potential to gain more market share by assisting those smaller players who wish to exit completely or sell their book of customers, in light of the cost associations of becoming compliant.
Money Advice Group’s proactive stance has allowed it to anticipate this shift in the debt management industry, and prior to its partnership with PNC, had self-funded an exercise in acquiring a small player exiting the market. The success of such a venture was the catalyst for its ambitious plans for growth and prompted the discussions with PNC to facilitate an acquisitions strategy.
The agreement with PNC is part of Money Advice Group’s overall expansion plans, which will see it take on an additional 3,500 feet² of office space within its existing premises, and boost its workforce with several new appointments within the management and client services teams. Money Advice Group has already recruited 60 members of staff in order to facilitate expansion, bringing the company workforce to 285.
Simon Brown, Managing Director, Money Advice Group commented: “With the introduction of more stringent compliance guidelines than our industry has ever witnessed, we spotted an opportunity in the market. We are extremely proud of our compliant culture but the costs associated with becoming compliant are too excessive for some of the smaller players, so what we find is they want to exit altogether or just sell on some of their books or assets. We trialed this approach last year with the successful acquisition of a smaller company, and it was from this we saw a clear direction for Money Advice Group.
“Our decision to work with PNC stemmed from its reputation in this arena, and its innovative approach to facilities based on loan to value rations against specific assets. This offered a more substantial funding line, enabling us to take advantage of the opportunities in the industry – specifically acquiring both medium-sized and large competitors, and to expand into new markets.
“We have ambitious plans for expansion and growth, and the partnership with PNC has assisted us in realising these plans. We look forward to continuing the working relationship with PNC Business Credit.”
Mark Shackleton, PNC Business Credit said: “Money Advice Group has the infrastructure, industry knowledge and experience to facilitate steady growth through acquisition. There is a clear strategy to grow the business and we are pleased to be adding Money Advice Group to our growing portfolio of clients”.
ENDS
RBS shareholders will never recover money they lost - Daily Telegraph
A share restructuring plan, which was approved at today's annual investor meeting will see the bank swap 10 of its existing shares for one new share. As a result of the scheme, which will take effect from June 6, the bank's share price will increase 10-times, pushing the share price to about 200p - the first time RBS shares will have traded at that price since September 2008.
RBS avoided the shareholder protest votes that have hit other major British businesses during the so-called "shareholder spring". However, with UKFI, which manages the state's 82pc holding in the bank, voting in favour of all the bank's resolution a protest vote was never considered likely.
Sir Philip told shareholders that despite chief executive, Stephen Hester, coming under pressure to give up his bonus the "great majority" of institutional investors had been in favour of awarding him the all-share payment worth nearly £1m.
Forex: GBP/USD nears 1.5500 level - FXStreet.com
MONEY MARKETS-Speculation of ECB interest rate cuts returns - Reuters
* Markets pricing small probability of ECB rate cut in June
* Such bets likely to accumulate in coming days
* As in May, markets could set themselves up for letdown
By Marius Zaharia
LONDON, May 30 (Reuters) - Bets that the ECB will cut interest rates next week are again appearing in money markets, as Spanish and Italian debt yields are approaching levels that made the central bank introduce unprecedented easing measures last year.
The threat that Greece could eventually leave the euro and worries over Spain's banking sector have prompted investors to sell Spanish and Italian debt, bringing the two countries' borrowing costs closer to levels deemed as unsustainable.
The sheer size of their debt markets and their deep-rooted connections with other financial systems in the euro zone are reasons for investors to speculate that a policy response is in the works.
The European Central Bank is, as usual, seen as the most likely institution to take measures to cool market nerves because it can act faster than politicians. It has done it before in the past by injecting around 1 trillion euros of cheap loans into financial system in December and February.
Euro zone economic data this month has also been poor, supporting bets that the ECB may soon resume monetary easing, possibly by cutting its key refinancing rate by 25 basis points from a record low of 1 percent.
"Data ... have been softer, and then you have the Greece issue continuing to be unresolved and the Spanish issue continuing to be unresolved," said Elaine Lin, a rate strategist at Morgan Stanley, whose economists predict a rate cut.
She said the euro overnight Eonia rate forward market was only pricing an over 10 percent probability of a rate cut in June and the chances were higher by another 10-20 percentage points for the July meeting. However, she expected markets to factor in a higher probability in the next few days.
A key rate cut, if also accompanied by a cut in the 25 basis points deposit facility rate, could trigger a 5-10 bps fall in the near-term forward Eonia rates towards the 20 bps level seen now in September-October Eonia forward rates, Lin said.
The lowest point on the 2012 Eonia curve is December, at 16 basis points, which implies an 80 percent probability that the deposit rate would be slashed in half, according to BNP Paribas rate strategist Matteo Regesta.
A Reuters poll of economists showed the ECB was likely to resist pressure to cut interest rates in June, but also pointed to a growing probability that it will reduce them later this year.
Speculation about ECB monetary easing has also been fuelling a rally in Euribor futures , implying bets for lower fixings of benchmark euro zone interbank three-month Euribor rates later this year.
The December Euribor future has gained back most of its losses made since Greece's inconclusive election on May 6, which sparked fears the country may be on its way out of the bloc. The fall earlier this month also coincided with unwinding bets that the ECB would have cut rates in May.
The contract was last 3.5 ticks higher on the day at 99.46. That was one tick lower than the pre-election close on May 4, but some 15 ticks higher from the lows hit in mid-May.
The move higher in Euribor futures, which has been faster than the move lower seen in the very low Eonia forward rates, has led to tighter Euribor/Eonia spreads, which are widely used as a gauge of money market stress.
That is counter to what is happening in banking credit default swap markets - where investors can insure against banking defaults. The Markit iTraxx index of European senior financials CDS remains close to its highest level this year at around 300 bps.
BNP Paribas' Regesta warned that Euribor futures could fall again as they have done after the ECB's May meeting and this would trigger a widening of the Euribor/Eonia spreads consistent with the levels of stress felt in money markets.
"You have a decoupling between those spreads and the banks CDS now, but those spreads remain exposed to significant paying interest in coming weeks ... unless there is another policy response from the ECB at its meeting next week," Regesta said.
Investment: Put the money where the mission is - ThirdSector
Investment illlustration
Ethical investment has grown enormously in recent years and is now central to many charities' policies - but some large ones believe it will damage their financial returns. David Ainsworth examines the state of play
Just over 20 years ago, the Bishop of Oxford launched a court case against the Church Commissioners, the investment arm of the Church of England, saying that he felt a charity had a duty not only to maximise financial returns when investing, but also to take ethical considerations into account.
The bishop won his case and, consequently, the Charity Commission rewrote its guidance to make it clear that a charity could exclude from its portfolio any companies to which it had moral objections.
The Church Commissioners, which manages more than £5bn, took the bishop's views to heart and now has one of the strictest policies of that sort anywhere in the UK. It excludes companies that sell tobacco, alcohol, pornography and weapons.
Since that case, ethical investment has evolved considerably. Charities and other investors have moved on from simply excluding those companies they dislike, known as 'negative screening'. When investing in companies, many now take into account the quality of their environmental, social and governance policies, or seek out companies that align with their mission.
Some have used their powers as shareholders to lobby companies for change, while others have stepped outside the mainstream stockmarket to invest only in organisations that actively work for social good - a process known as 'social investment' or 'programme-related investment'.
However, the level of interest in ethical investment varies widely from charity to charity, says Richard Jenkins, policy officer at the Association of Charitable Foundations, who recently compiled a guide called The Governance and Financial Management of Endowed Charitable Foundations.
"We spoke to a lot of charities about this when we compiled the guide," he says. "We found an enormously diverse range of responses. Some charities weren't doing it at all. Others were extremely involved."
A survey in 2009 of 164 Charity Finance Group members by the group and Eiris, a not-for-profit organisation that conducts research into ethical investment, found that 60 per cent of organisations that invested more than £1m had some sort of ethical investment policy. Of those, a quarter went further that just negative screening.
Victoria Heath, head of business development at Eiris, says she believes the focus on ethical investment has increased in the three years since that survey was published. But some large charities still deliberately do not adopt the policy, she says, because they fear it will limit returns.
"For me, it's a no-brainer that you should invest in line with your mission because, if you don't, you're probably investing in someone whose actions run directly contrary to that mission," she says. "But some very big charities are not doing that. They say clearly on their websites that they invest to maximise return."
Heath says one common reason given by those that do not have ethical investment policies is that trustees still believe they have a legal duty to maximise returns, and that it is unlawful to exclude investments on moral grounds. Others believe that ethical investment will damage their returns.
Others, she says, shy away because the process of developing an ethical investment policy is seen as time-consuming and difficult. "But it's not illegal, and it won't negatively affect your returns," she says. "It's possible to develop a policy relatively simply."
Jenkins says that evidence gathered while compiling his guide suggested that ethical investment is moving up foundations' agendas. One reason for this, he says, is the publication of guidance that makes it clear that charities can invest ethically, notably the Charity Commission's investment guidance CC14, published last year. He says this gives charities "a really pragmatic and permissive power to invest in ways that are relevant to their beneficiaries".
The UN Principles for Responsible Investment, launched in 2006, have also highlighted the issue to all investors. "I think the financial crash also made a difference," says Jenkins. "I'm sure it's made people think about whether their money is really doing what they want."
Above and beyond that, he says, there is an increasing move among foundations towards 'whole-balance-sheet investing'. "Foundations are thinking about how they can use every penny at their disposal to achieve their objectives," he says. "But there's always a delicate balance between the extra good you can do with your investments and the good you can do with the extra investment return."
Helen Wildsmith, head of ethical and responsible investment at the fund manager CCLA, says that the move towards ethical investing appears to be one-way traffic. "I've never heard of anyone abandoning their ethical investment policy once they've got one," she says. "It only moves in one direction."
Wildsmith says all money managed in CCLA funds is subject to some form of ethical screening. "We have two policies," she says. "One of those excludes tobacco and weapons banned by international treaty; the other has much more extensive screening. The first excludes about 3 per cent of the market, the second about 10 per cent.
"But what we're also finding is that charities aren't interested in exclusions only. Our clients have told us they want us to be engaged investors, and to use their shares to vote on issues such as human rights and child labour. And if engagement doesn't work, they've told us to divest."
In one high-profile case, charities sold their shares in protest about poor conduct by the mining company Vedanta. A coalition of church investors, including CCLA, the Central Finance Board of the Methodist Church, the Joseph Rowntree Charitable Trust and the Church Commissioners, put pressure on the company over its plans to mine a sacred mountain in India, and eventually sold their shares in protest.
Edward Mason, secretary to the Church of England ethical investment advisory group, who took part in the divestment process, says that getting involved in ethical investment can look complicated at first, but "you shouldn't throw your hands in the air and do nothing".
He says: "There are plenty of organisations that can help. The guidance is very good. You can ask your fund manager what they can do for you. Managers respond to their clients. If enough clients ask them for something, they'll do it.
"The evidence isn't entirely clear that there's an active investment benefit, but it's pretty clear that there's no detriment. And it's a good investment process to take into account issues that could affect the stock in the long term."
Gemma Woodward, an investment manager at the fund management company Newton, says that taking account of environmental, social and governance issues - known as ESG for short - is simply good financial management, as well as having an ethical benefit. "Our belief is that ESG factors affect share price and you need to understand them," she says. "We think looking at ESG is integral to good investment processes, particularly over the long term."
Woodward says another reason to have an ethical investment framework is the wishes of supporters. "There's a clear indication that supporters feel charities should have ethical investment policies," she says.
"Once you've developed a policy, test it. Find out where your concerns are. Make sure it's really doing what you want it to. It can be quite a lot of work to set up, but it's not that hard to run."
- Read our interview with the head of Panahpur, James Perry
- See our article on the new guidance for charities on social investment
- Check out our case study about the Esmee Fairbairn Foundation's investment strategy
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