Press Releases

Money Marketing
15 January 2003
"Inter-Alliance acquires 50 per cent stakes in OFS WorldNet"

Inter-Alliance International has completed its acquisition of a 50 per cent stake in OFS WorldNet to form a new joint venture based in Cyprus. Inter-Alliance WorldNet will become part of the stock market-listed IFA group through the deal, which was first revealed by International Money Marketing last September.

The new structure will see the joint venture operate as a network of autonomous IFA firms while Inter-Alliance International, which has 70 advisers, will remain an integrated International business. However, the two entities will share central administration and services and the resulting overheads.

Inter-Alliance International says it has paid a "nominal" sum for its 50 per cent stake in OFS WorldNet. Share options are also being offered to the "top performers" in the joint venture.

Inter-Alliance WorldNet has also promised in principle to buy practices from members to ensure they can release some value from their IFA businesses.

According to Kevin Mudd, who was Chairman and Chief Executive of OFS and becomes Managing Director of the joint venture, there are three advantages of the deal with Inter-Alliance, which covers all parts of the OFS WorldNet network including OFS Asia.

First, Mudd has always aimed to list OFS WorldNet on a stock market. This deal acts as a short-cut to achieving this aim by becoming part of a London-listed IFA firm.

Second, by combining the 150-odd brokers of Inter-Alliance International and the OFS network, the combined group will have more bargaining power to negotiate higher commissions and marketing allowances with a wider group of product providers.

Third, by combining the two businesses' marketing, research, training, IT development, personnel and head-quarters in Limassol, Cyprus, the enlarged group can reduce its costs.

Brian Cosgrave, Chief Executive of Inter-Alliance International, becomes a non-executive Director of the joint venture. He says: "We have long recognised the need for an attractive proposition for experienced international IFAs keen to be part of a recognised international group but who wish to retain their own identity and operate under their own individual brands.

"The launch of Inter-Alliance WorldNet gives us the opportunity to combine the experience of OFS in the network market with the management and marketing resources of Inter-Alliance International."

Inter-Alliance International plans to obtain licenses to operate in Bahrain, Hong Kong and Singapore in 2003 and expand into East Africa.

In June 2002, Inter-Alliance agreed to sell its Hong Kong business, MBA Berkeley Burke, and its 10 advisers back to its former Chief Executive, David French, for a "nominal sum".

The reorientation of Inter-Alliance International follows a four-month review of the international business by its parent, UK IFA network Inter-Alliance, at the start of 2002. The offshore business made a loss of £700,000 in 2001.