PROVEN Investments Limited (PIL) the investment house started by Peter Bunting, Mark Golding, Gary Sinclair and Christopher Williams has posted a net profit of US$5.55 million for the seven months ended September 30, 2010.

Consolidated net revenue for the period under review amounted to US$2.65 million with net interest income coming to US$1.04 million. Securities trading gains of US$1.56 million contributed 59 per cent to net revenue. Also contributing to net revenue albeit at a somewhat lesser capacity was fees and commission income which came to US$33,565 and foreign exchange gains of US$20,610.

Companies throughout Jamaica are fighting a battle to contain operating expenses and here for the seven month period, Proven’s amounted to US$630,477 representing an efficiency ratio of 23.8 per cent. Total consolidated assets as at September 30 stood at US$174.5 million, with the acquisition of Guardian Asset Management Jamaica Limited contributing US$139 million to this figure.

According to a press release put out by Proven yesterday, these assets were funded mainly by client liabilities in the form of repurchase agreements with Proven Wealth Limited, which had a balance of US$111 million at the end of the quarter.

“During the quarter we successfully implemented our strategy of de-leveraging the balance sheet of Proven Wealth Limited and reducing the overall exposure to the Government of Jamaica by selling over US$56 million worth of assets. The proceeds of these assets sales has been used to reduce the exposure to volatile, rate-sensitive, institutional funding, as well as being redeployed in less risky, lower duration assets.

“Over the coming months we will continue to execute this strategy of reducing the size of the balance sheet and offering portfolio management services to our valued clients. The PIL unconsolidated assets stood at US$51.9 million as at September 30 with 64 per cent invested primarily in fixed income instruments and 50 per cent of the assets invested in investment grade instruments,” read the release.

Proceeds from the issue of share capital amounted to US$19.878 million. Following the Rights Issue which closed in August 2010 where an additional US$9.8 million in capital was raised, Shareholder’s Equity stood at US$36.95 million as at September 30, corresponding to a capital to asset ratio of 21 per cent and a book value per share of 12.53 per cent.

The Board of Directors have approved a dividend payment of US$800,000 or US$0.27 cents per share to all shareholders on record as at October 31 and payable on November 19. This represents an annualised tax-free dividend yield of 6.11 per cent. The Board of Directors have approved the submission of the application to the Jamaica Stock Exchange for the listing of the ordinary shares of Proven Investments Limited. This process is expected to be completed before the end of the first quarter of 2011.

Speaking with the Business Observer yesterday, Proven Investment CEO Christopher Williams said: “Proven Investments is a regional investment company which is distinct from an investment management company. Our main company is Proven Investment Limited (PIL) which is incorporated in St Lucia. The main objective of PIL is to identify investment opportunities both tradable and non-tradeable, debt and equity right across the world. Our strategy has been threefold. First, to take advantage of the historically low interest rates across the globe. We have made the most of what is commonly known as the “carry-trade” (borrowing at a lower rate and investing at ahigher rate thus making a spread). Second, we have been “positioning”. By this I mean buying an item whether it be a bond or stock in the anticipation that it will improve in value, then selling it, therefore making a trading gain. Both those strategies have yielded us a return of 14 per cent on an annualised basis over the last seven months. The third strategy that has yielded us a very attractive return over the last seven months is the private deals.This is where we are looking for debt or equity needs of companies and seeking to satisfy them.”

Williams further added that on the debt side, Proven has had significant success because of the hesitance of the commercial banks in reducing rates. This has worked well for the new investment house he says because it is sitting on cash and looking for opportunities. It has already concluded a deal with Michael Ammar’s retail emporium chain and another with a major utility company to the tune of a US$5 million investment. Proven has searched out deals across the Caribbean but more specifically, Trinidad, St Lucia and the Cayman Islands.

Speaking with the Business Observer yesterday, Proven Investment CEO Christopher Williams said: “Proven Investments is a regional investment company which is distinct from an investment management company. Our main company is Proven Investment Limited (PIL) which is incorporated in St Lucia. The main objective of PIL is to identify investment opportunities both tradable and non-tradeable, debt and equity right across the world. Our strategy has been threefold. First, to take advantage of the historically low interest rates across the globe. We have made the most of what is commonly known as the “carry-trade” (borrowing at a lower rate and investing at ahigher rate thus making a spread). Second, we have been “positioning”. By this I mean buying an item whether it be a bond or stock in the anticipation that it will improve in value, then selling it, therefore making a trading gain. Both those strategies have yielded us a return of 14 per cent on an annualised basis over the last seven months. The third strategy that has yielded us a very attractive return over the last seven months is the private deals.This is where we are looking for debt or equity needs of companies and seeking to satisfy them.”

Williams further added that on the debt side, Proven has had significant success because of the hesitance of the commercial banks in reducing rates. This has worked well for the new investment house he says because it is sitting on cash and looking for opportunities. It has already concluded a deal with Michael Ammar’s retail emporium chain and another with a major utility company to the tune of a US$5 million investment. Proven has searched out deals across the Caribbean but more specifically, Trinidad, St Lucia and the Cayman Islands.

On the equity side, the acquisition of Guardian Asset Management ( GAM) has worked out well. Here Proven snapped it up at a discount to book. The transition has gone smoothly with Proven making 30 positions redundant. Most of those workers were accommodated by Guardian Life thus not rendering them unemployed. Proven has restructured GAM’s balance sheet to reduce the long term liquidity risk and is now intent on growing that business.