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A Christchurch-based investment firm has conditionally agreed to buy the financial advisory business of Vestar but says it won't be held responsible for past mistakes made by the company.
Gould Holdings said late on Wednesday its subsidiary Gould Wealth Management had reached a formal deal with MFS New Zealand, which manages the business on behalf of Vestar's troubled Australian owner, MFS.
Gould's head of strategy, Jeff Staniland, who will be chief executive of the new company, said the deal was conditional on a certain number of Vestar's clients agreeing to come over to the new company.
Vestar has around 3000 investors throughout New Zealand with about $800 million in funds under management.
Gould wants at least 50 per cent of the assets to be given over to its management before it will pay up an undisclosed percentage of the assets to MFS.
Staniland said Gould had written to Vestar's clients this week advising them of the offer and asking them to sign over the management of their assets.
As a sweetener investors will be offered a 0.1 per cent fee reduction on their portfolios for one year. They are currently charged at between 0.8 and 1.8 per cent of their assets under management.
Gould has also offered to help investors who have money tied up in failed finance companies.
Many Vestar investors are caught up with Bridgecorp, Nathans Finance, Capital + Merchant which have gone under as well as MFS Boston and MFS Pacific Finance which are in moratoriums.
Staniland said between 10 and 30 per cent of Vestar's assets might be tied up in finance company investments which were now impaired.
But as well as agreeing to sign over the management of their assets, Vestar investors will also be asked to confirm Gould has no liability for Vestar's errors.
Staniland said it was not responsible for past problems of the company and could not fix them.
"It's not our responsibility but we want to try and help - it's in our best interests to do so."
Last year MFS promised Vestar investors it would ensure they did not suffer a capital loss on their Capital + Merchant investment.
Yesterday a spokesman for MFS New Zealand, now called OPI New Zealand, said MFS had put a great deal of work into a proposal for investors but its current financial position now prevented it from being able to issue that proposal.
The New Zealand firm has been on a trading halt since February and its main business, MFS Pacific Finance, recently entered into a three-year moratorium.
MFS, now called Octaviar, ran into trouble in January and has been desperately trying to sell off assets in a bid to meet its liabilities.
Yesterday it emerged that the Public Trustee of Queensland has applied to the Queensland Supreme Court to wind up the company.
