Leading New Zealand investment bank Craigs Investment Partners (Craigs) has emphasised its commitment to keeping its head office in the Tauranga CBD. And it has just announced a new strategic alliance with global bank JP Morgan (JPM), which managing director Frank Aldridge told Bay of Plenty Business News would enable Craigs to maintain its independence, but improve its global network and local offerings.
“We retain 100 percent ownership of Craigs, and we are 100 percent committed to keeping our head office in Tauranga,” he said. Craigs announced the re-purchase of Deutsche Bank’s 49.9 percent interest in their business late last year.
Aldridge said the alliance with JPM was unrelated to Covid-19, though the timing was expected to be helpful in strengthening its global ties and position.
Commitment to staff ownership
“It was definitely our intention when we bought back the Deutsche Bank stake to be a fully staff-owned firm,” he said. “We’ve had discussions with a number of parties and JPM was a standout for us. From a New Zealand perspective it was very important we kept our independence. And they don’t have an operation here, aside from a small custody business. We are effectively going to be their New Zealand branch.”
Strategic strengths
The strategic alliance brings together the deep geographical expertise and strong corporate relationships of Craigs in New Zealand, with JPM’s global corporate advisory and equity capital markets experience.
JPM is a leader in Mergers and Acquisitions, Equity Capital Markets and Debt Capital Markets, as well in Equity Sales and Sales Trading. Coupling their franchise strength and expertise with Craigs’ leading private wealth and investment banking business in New Zealand solidifies the alliance as a market-leading offering, the companies said in a statement.
“We are excited to be forming a strategic alliance with Craigs,” said Robert Bedwell, chief executive officer, JPM Australia and New Zealand.
“This reaffirms our commitment to delivering our full range of local and global capabilities to Australasian clients and elevates our offering for New Zealand-based clients.”
Aldridge said it was good for Craigs and for New Zealand that one of the biggest global banks wanted to work with them. “It’s good for our staff and our clients.”
Broader range of products
While the alliance brings benefits to Craigs’ corporate and private wealth clients, there will be no change to the business structure, the operations or management team leading the firm and service to clients would remain seamless, said Aldridge.
The opportunity to work closely with JPM would help Craigs offer an even broader range of financial products and services, and significant investment opportunities for clients.
Aldridge said there were several key touch points in the deal. One was in the firm’s institutional equities business. Craigs will get JPM’s global flows into New Zealand and would direct its own international flows back through JPM. “We will also be partners in terms of any M&A and large trades involving New Zealand.”
And a third element was the expected impact on Craigs’ private wealth business, which accounts for 80 per cent of its revenues and profits.
“We’re really looking to try and evolve and access JPM’s products and services in private banking components globally, to bring these back to our clients in New Zealand.”
Aldridge said that the impact of Covid-19 had not changed Craigs’ decision-making process.
New office space considerations
In terms of office relocations, Aldridge confirmed a recent newspaper report that Craigs planned to go ahead with a long-discussed move to larger premises in Tauranga’s downtown.
Property development and investment company, Willis Bond & Co has plans to develop the 4300 sq m site at 82-98 Devonport Rd, which is currently the subject of a conditional sale and purchase agreement with the owner, Tauranga City Council. Craigs was reported as a likely anchor tenant.
Aldridge reaffirmed to the Bay of Plenty Business News that the firm was committed to finding new premises within the Tauranga CBD and would be wanting naming rights.
“We’re still going through a due diligence process on what we need and how we do it,” he said, adding that the Devonport Rd site was “the one we’re focusing on right now”.
The new norm is unknown
Craigs has 170 staff in Spring Street and a further 50 in Red Square. But Aldridge said a new build was realistically two-and-a-half years away.
“We have a plan catering for growth out to 2025,” he said.
“We’re firmly centred on head office being in Tauranga, and we want to get us all back together in a purpose-build environment.
“But what is the new norm? We got 540 people [nationally] working from home in four days prior to lockdown.
“I think there is going to be a new norm, but I don’t quite know what that is. It’s still too early to say what is going to happen. Nobody really knows and we won’t see for the next three to nine months.”
But he said that anecdotally, it seemed as if New Zealand and Australia were not bad places to be in at the moment. “This is a tough time, but I’m sure we’ll come through it.”
