ING To Sell Guam-Vested Credit Union Middleman To Private Equity Firm

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Written by Jeff Marchesseault, Guam News Factor Staff Writer

Wednesday, 04 November 2009 04:17

PrimeVest

Retail Broker-Dealer Does Business On Island, Plus 50 States

By Jeff Marchesseault

GUAM - One of Guam's finance industry middlemen is about to be sold off from its multinational parent corporation. The retail broker-dealer supports a number of individual and commercial clients nationally, including credit unions.

Amsterdam-based ING Group has announced that it will sell three of its U.S. independent retail broker-dealer units to private equity firm Lightyear Capital LLC, according to Credit Union Times. The sale reportedly represents three-quarters of ING Advisers Network.

CU Times reports that one of those retail broker-dealers is PrimeVest Financial Services, which does business with nearly 600 financial institutions, including nearly a dozen credit union clients, in all 50 states and Guam.

According to its corporate webstie, ING Group is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services. It serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia.

In North America, ING has recently be refocusing on its U.S. core of Retirement Services, Life Insurance and Rollover Annuities, and thus the broker-dealer sectional sell-off agreement. An ING news release states, "The transaction is not expected to have a material impact on ING's earnings."

Retail broker-dealers like PrimeVest trade securities for their own account and exercise the option of reselling to clients or other firms, with disclosure. As Dun & Bradstreet's AllBusiness.com explains, "The element of inventory risk is what distinguishes a dealer from an agent or sales representative" (broker).

Read the Credit Union Times story, "ING to Sell Broker-Dealer PrimeVest", November 3, 2009.

Here is the corporate news release announcing the pending sale:

ING Agrees To Sell Three Of Its U.S. Broker-Dealers To Lightyear

Amsterdam, 3 November 2009

ING announced today that it has reached an agreement to sell three of its U.S. independent retail broker-dealer units, which comprise three-quarters of ING Advisors Network, to Lightyear Capital LLC. Terms of the agreement were not disclosed. The transaction is not expected to have a material impact on ING's earnings.

The transaction concerns Financial Network Investment Corporation, based in El Segundo, Calif., Multi-Financial Securities Corporation, based in Denver, Colo., PrimeVest Financial Services, Inc., based in St. Cloud, Minn., and ING Brokers Network LLC, the holding company and back-office shared services supporting those broker dealers, which collectively do business as ING Advisors Network.

ING will retain ING Financial Advisers, Inc., based in Windsor, Conn., and ING Financial Partners, Inc., based in Des Moines, Iowa. ING chose to retain these broker-dealers because they are closely-affiliated and play a key role in ING's strategy in the U.S. which focuses on Retirement Services, Life Insurance and Rollover Annuities.

"This transaction simplifies ING's structure in the U.S., and allows us to focus resources and capital on our core Retirement Services, Life Insurance, and Rollover Annuity businesses," said Tom McInerney, member of the Management Board Insurance of ING Group. "It is also in the best interest of the broker-dealers, their employees, and the affiliated representatives and financial institutions, to find a new ownership structure. We believe that Lightyear will be an outstanding owner of these broker-dealers and be able to ensure a promising future for these businesses."

Lightyear is a recognized private equity firm in the U.S. that specializes in investing in financial services companies. With a successful track record of investing in well-managed, high-performing companies poised for strong future growth, Lightyear currently manages approximately US $3 billion in committed capital. Lightyear's principals average more than 25 years of experience across the financial services industry.

Financial Network, Multi-Financial, and PrimeVest together represent one of the largest and most accomplished broker-dealer networks in the U.S. industry. With strong and experienced management teams, exceptional back-office technology, plus a diversity of field management structures to accommodate a wide variety of financial professionals' businesses, these broker-dealers have been leaders in the broker-dealer industry for many years. In 2008, collectively, the broker-dealers had more than 5,000 affiliated independent registered representatives and generated total concession revenue of approximately US $600 million. A broker-dealer firm generally executes the buying and selling of securities on behalf of its registered independent representatives, otherwise know as affiliated brokers.

This transaction is subject to regulatory approvals and is expected to be closed in the first quarter of 2010.

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