FRESH from the completion of its restructuring, the VM Group — a mutual holding company — has now focused its sights on raising $11 billion in new capital before the end of this month, with the aim of tripling its profits in the next few years while it seeks growth through acquisitions in the Caribbean.

Having undergone what President and CEO Courtney Campbell describes as a transformational period over the last five years, introducing a number of new loan products and acquisitions which ballooned its revenues 97 per cent from $6.5 billion in 2017 to $12.83 billion in 2022, within that time, VM Building Society’s loan portfolio increased from $44 billion to $112 billion.

“We are now well-poised to accelerate the growth of the VM Group and we’re looking for more and more partnerships, and also want to ensure that all operating entities are well-capitalised, and so the next move for us is to arrange a fund-raising — capital-raising activities — at the level of VM Financial Group to better capitalise and prepare for the future of our operating entities,” Campbell said at a recent Jamaica Observer Business Forum.

Chief Investment Officer (CIO) Devon Barrett, under whose portfolio the capital raise will fall, said the proceeds will be deployed across the group’s subsidiaries as “we’re looking to triple profits over the next five years”. That would see operating profits moving to about $6 billion. The VM Group reported operating profit of $2.1 billion in 2022.

While explaining the need to grow both organically and inorganically to realise this goal, Barrett pointed out the need invest new funds in the various business lines and reiterated that fund-raising activities were essential.

“Over the next few weeks we’re looking to raise $11 billion in new capital from the market. We’re going to issue some new instruments,” he stated, adding that VM Group will issue preference shares in three tranches.

Proceeds from the issuing of the instruments will be used to bolster the group’s loans and investment banking businesses, as well as take advantage of partnership and minority stake acquisitions across the region.

Pointing to VM Group’s 39 per cent holdings in British Caribbean Insurance Company (BCIC) and 30 per cent interest in Barbados-based, peer-to-peer lending platform Carilend, Barrett said the company is looking to expand its regional footprint through these brands. Since these acquisitions, BCIC has expanded into Barbados and Turks and Caicos Islands while Carilend has created operations in Jamaica and Trinidad.

Commenting on Carilend, the CIO said, “We have a really great partnership in Trinidad and Tobago that is growing faster than the other two businesses that we’ve had with Carilend before and so that is an area where there are really good opportunities for growth in the future. The point is, we’re going to need to make some more partnerships.”

With the successful growth of BCIC and Carilend top of mind, Barrett told the Business Observer that the VM Group is hoping to replicate the model by acquiring small stakes in companies and influencing their regional growth.

“What we’re looking to do is similar transactions around the region in the future and it requires getting capital to make these partial acquisitions,” he explained further.

While the VM Group has identified entities and there are transactions in the pipeline, Barrett stated that the name of the entities cannot be revealed until the transactions are concluded. Moreover, he said that although the company has expanded in Canada, the United Kingdom, and the United States, it has surveyed and discovered that companies in the region that usually purchase financial products and services are looking into Caribbean and Latin America for financial assets. He said the immediate markets to go after those assets are in Guyana, the Dominican Republic and Costa Rica.

On this note, the Business Obsever asked if the VM Group also saw opportunities in the Eastern Caribbean for expansion, given the capital flight experienced with the divestment of Canadian-owned banks RBC, Scotiabank and CIBC FirstCaribbean.

“We are actually looking for opportunities in the Eastern Caribbean and that’s one of the areas we think is sort of a low-hanging fruit, and it started back in 2015 when the international banks started to derisk and move out of the region. What we saw from then was the need for some sort of consolidation,” Barrett shared.

“So right now we are in discussions [about] some of those opportunities and [how] to access some of those financial opportunities,” he added.

Again, he pointed to the VM Group’s approach to partner with other financial institutions by taking a small stake in a business as “the best way to grow and scale business” rather than develop greenfield brick-and-mortar establishments. One of the ways to do so, he said, is to impart the expertise and technology of the VM Group.

Moreover, he said that securing a foothold in one Eastern Caribbean Currency Union member country creates an opportunity to enter into another.

Over in Barbados, consequent on VM Investments Limited’s 100 per cent acquisition of Rebublic Bank Barbados (Limited) in 2021, the company is getting ready to roll out three new unit trust products — Republic Property Fund, Republic Income Fund and Republic Capital Growth Fund. The funds are “90 per cent in terms of regulatory approval”, according to VM Wealth Management CEO Rezworth Burcheson.

With assets under management totalling US$10 million, Burcheson said the VM Group is leveraging its asset management capabilities in that country through the acquisition. He further pointed out that a “similar asset management portal” will be rolled out once the company secures a foothold in another country.

Additionally, Burcheson said the hiring of Brian Fraser as deputy CEO of VM Investments Limited last September will augur well for the group’s regional expansion strategy since he has significant experience “building similar platforms in the southern Caribbean”.