ASX-listed Generation Development Group has confirmed its intention to wind up Ascalon Capital Managers, just two years after acquiring it from Westpac. It also announced plans to launch an income fund and a lifetime annuity.
Generation has announced it will cease its investment in Ascalon Capital Managers, which it acquired after Westpac offloaded it in 2018.
Generation chief financial officer Terence Wong told Financial Standard that unless another option comes up, the group will dissolve Ascalon.
"This has been a successful investment from a shareholder's perspective in that we will have made a profit of over $1 million after taking into account the investment made in the business," Generation chair Rob Coombe said.
Despite this, he cited the political disruption in Hong Kong along with COVID-19 as to why it was unable to execute its growth plans.
"This derailed capital raising efforts and we have decided to self-cease," Wong added.
Under the acquisition, Ascalon retained interests in Morphic Asset Management and Deepwater Capital. In June 2019, Morphic was sold to Ellerston Capital.
Furthermore, Coombe revealed its plans to launch the Generation Life Equity Income Fund - a tax-effective income fund for high net worth investors to take advantage of its existing bond business structure with added income.
Generation said the search for yield appears "unstoppable" and the market opportunity for income producing products with less risk is around $800 billion.
The fund will have a tax rate of less than 10% and targeting flows outside the traditional investment bond space. It will commence its bookbuild in December and will launch to retail investors in April 2021.
The Generation Life Market Linked Annuity is due to launch at the end of FY2021 and aims to provide retirees with income for life.
"The possibility of someone outliving their savings is one of the biggest risks facing many retirees today and this risk is increasing for Australia as more and more baby boomers move into retirement," Coombe said.
"From a Generation Development Group Perspective, the exciting aspect of this opportunity is that it takes us from being a meaningful participant in a $12 billion segment of the financial services industry, to a player in the retirement incomes space." The group first notified its intention to enter the retirement space when it acquired a 37% stake in research and ratings house Lonsec.
Generation said it will continue its supporting Lonsec in its ongoing expansion and growth plans.