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Key Points:
- ARC Funds Limited acquires 30% of ausbiz Capital, investing $1 million in three stages.
- Ausbiz Capital will offer financial products like term deposits, capital raising, and digital investor services.
- The partnership includes a 3-year exclusivity period for marketing to over 110,000 ausbiz Group subscribers.
ARC Funds Limited (ASX:ARC) has announced a strategic partnership through the acquisition of a 30% minority equity stake in ausbiz Capital Pty Ltd, a new financial services business under ausbiz Group Pty Ltd. This partnership positions ARC Funds to participate in the expansion of high-quality financial products and services aimed at a growing audience of over 110,000 ausbiz Group subscribers.
Ausbiz Capital’s Ambitious Vision
Ausbiz Capital, a wholly-owned subsidiary of ausbiz Group, is poised to offer a suite of financial products and services, leveraging the extensive subscriber base of its parent company. Ausbiz Capital’s Managing Director, Simon van Es, will oversee the launch of this venture, with initial product offerings set to debut in November 2024. These offerings are designed to cater to the diverse financial needs of its users, ranging from traditional investment products to digital and alternative financial solutions.
Among the initial products to be offered are term deposits, high-interest savings accounts, and capital raising opportunities. Additionally, ausbiz Capital will provide alternative investment options with a focus on generating income for investors. The business also plans to roll out model portfolio and trading services, managed funds, and specialized investor relations services. One of the standout features of the offering is ausbiz TV, a digital platform that will provide company promotion services, allowing subscribers to engage directly with listed companies.
Strategic Partnership for Growth
The partnership between ARC Funds and ausbiz Capital is governed by a binding agreement that ensures a 3-year exclusivity term. During this period, ausbiz Capital will market its products and services to the existing database of ausbiz Group subscribers. Ausbiz Group will provide crucial marketing and promotion services to maximize the reach of ausbiz Capital’s product suite, helping to establish a strong foothold in the competitive financial services industry.
The experienced leadership at ausbiz Capital is another key strength. The board includes Simon van Es as Managing Director, along with Wayne Mo and Scott Beeton, both of whom bring proven track records in developing and managing successful financial services ventures. This leadership team will steer ausbiz Capital towards becoming a significant player in the industry.
Key Financial Commitments
ARC Funds’ investment in ausbiz Capital is structured in three stages. The first tranche, totaling $670,000, will secure an initial 22.3% interest in the company. Subsequent tranches, scheduled for January 2025 and April 2025, will see ARC contribute an additional $330,000 in two equal payments. Upon the completion of these investments, ARC will hold a 30% stake in ausbiz Capital, with a total investment of $1 million.
The transaction is governed by a subscription agreement and a shareholder agreement, both of which outline the terms of ARC’s investment. These agreements also include standard commercial terms, ensuring that both parties are aligned on the financial and operational aspects of the partnership.
Looking Ahead
This partnership marks a significant milestone for ARC Funds as it diversifies its portfolio into the financial services sector. By investing in ausbiz Capital, ARC is positioning itself to benefit from the growing demand for innovative financial products and services among retail investors. The strong leadership at ausbiz Capital and the expansive reach of ausbiz Group’s subscriber base are expected to drive success as the business launches its initial products later this year.
In the long term, this strategic investment is likely to yield substantial returns for ARC Funds as ausbiz Capital scales its operations and expands its product offerings.
