The short-term fixed interest market has been dominated by ANZ owned UDC over recent years. The Finance Company sector has been well established and active in New Zealand. Names such as UDC, Marac, General Finance, etc. have been deposit takers for decades. As with Banks there have always been takeovers, changes of ownership, and new startups regularly over the decades.
“The value to investors in the Finance Company sector is that the interest rates are higher than the banks’ and the terms can be tailored to the investor’s requirements. Investors can select unusual terms like 11 months & 15 days, or 2 years, 2 months & 22 days. This allows investors to have maturities that meet their needs”, said Mr. Brent King, Managing Director of General Finance.
With UDC having advised the market in January 2019 that it will repay ALL deposits in Mid/Late 2019, investors are seeking alternatives.
“There appears to be a market awareness that the size of this repayment ($922 million) will make it hard to for investors to find alternate investments. General Finance has noticed a significant lift in enquiry since January 2019”, said Mr. King. The looming repayment plus the talk of interest rates dropping seems to be making smart investors look seriously at the New Zealand owned businesses.
General Finance Ltd is wholly owned by NZ listed company General Capital Ltd. Brent King is the Managing Director of both companies and also a significant shareholder of General Capital.