VM Group Limited is looking to expand its private equity portfolio as it looks to partner with businesses across the Caribbean.

At a Jamaica Observer Business Forum held last Wednesday, executive members of the VM Group outlined plans to further expand the mutually owned entity in the Caribbean and build out into Latin America. This is to be facilitated under the newly structured VM Group, which President and Chief Executive Officer (CEO) Courtney Campbell outlined as critical to supporting this expansion.

“Last year we would have really stepped out into the private equity space. In conjunction with Actus we actually launched JASMEF, our private equity which is now looking for investment opportunities. We see value in private equity. As our equity markets continue to grow you’re going to see more companies come to market, and we want to build a pipeline to ensure that we invest the capital and transform those businesses. There’s lot of value in PE investments,” said Victoria Mutual Investments Limited (VMIL) CEO Rezworth Burchenson at the Jamaica Observer Business Forum.

JASMEF is the Jamaica Actus Small and Medium Enterprise Fund which was launched last June between VMIL, the Development Bank of Jamaica Limited, and Actus Partners. It is a private equity fund capitalised to the tune of US$15 million, with VMIL committing US$10 million to the fund.

While most of the funding is yet to be fully deployed, Burchenson mentioned that they would look to do another raise for JASMEF with external partners when the fund is fully invested.

Burchenson sees the fund as a way to support different small businesses and build on VM partnerships. VMIL recently disclosed that it had taken its first private equity investment in Coldbush Organics in October 2018 when it purchased a five per cent stake through its subsidiary VM Wealth Management Limited (VMWM). Coldbush has since grown from an initial five to 20 acres, with the business now owning 50 acres.

VMIL also owns a 30 per cent stake in Carilend Caribbean Holdings Limited which now has a US$130-million loan portfolio across Jamaica, Barbados and Trinidad and Tobago. While the associate stake value has declined due to losses, Carilend has grown its presence in the last five years.

“JASMEF would provide the equity to grow these companies. Our intention is that they’ll want to list at some future point in time, that VM Wealth Management would be the broker dealer of choice to take them public. Even though JASMEF is investing in PE deals we’ve done on a few on our own, and as we see opportunities we’ll capitalise on them,” Burchenson added on the potential opportunities which can arise from the JASMEF fund.

When asked why VMIL took an associate stake in Kingston Properties Limited (KPREIT), Burchenson said, “One thing VM is known for is real estate, and we want to be across all jurisdictions in which we do business that we’re real estate experts. We do real estate in Jamaica on the mortgage side, we dabble in development financing in the UK, and Courtney spoke about VM Finance also financing developers in that space.”

VMIL spent $1.05 billion on December 30 to increase its position in KPREIT to 22.91 per cent at the time. VMIL also raised $5.5 billion recently through a bond to not only grow its margin loan portfolio, but also provide it with capital and liquidity to take on opportunities or support VM Wealth.

Burchenson continued, “So, when we looked at Kingston Properties we said, ‘Here’s an opportunity that we can solidify our name in that space.’ It’s an open secret that we have a top-performing real estate portfolio for a number of years. We know real estate, and when we saw the opportunity we said, ‘Here’s an opportunity to invest in that business.’ That business gives us some level of stability on the revenue line in VMIL.”

The VM Group is looking to expand its presence into the eastern Caribbean and Latin America, which the VM executives said would be achieved through partnerships. One example of a recent partnership they described was the sale of Victoria Mutual Insurance Company in June 2010 to British Insurance Caribbean Company Limited (BCIC) for a stake in this combined business. The VM Group owned 39.24 per cent of British Caribbean Insurance Company Limited at the end of 2021, with Campbell and VM Group Chief Investment Officer (CIO) Devon Barrett sitting on the board of directors.

“Yes, we’ll take a stake in a business, whatever the business opportunity is — that’s the kind of partnership we’d like to utilise in the eastern Caribbean. What you have is that they’d still have an ownership stake in the business but they’d have sort of a big brother partnering with them to take them to the next level. That, we think, is the real opportunity in the eastern Caribbean,” Barrett added on the type of approach that would be taken in growing its eastern Caribbean presence.

The CIO explained that with the de-risking of the eastern Caribbean by different international banks, the VM Group has the opportunity to go and provide a form of consolidation while utilising the technology and resources present in Jamaica to build out that platform. VMIL is currently awaiting final regulatory approval to acquire Republic Funds (Barbados) Inc, which was announced from November 2021.

“We are actually looking at opportunities in the eastern Caribbean and that’s one of the areas that we think is a low-hanging fruit. Right now we’re in discussions with [regards to] some opportunities in the eastern Caribbean to access some of those financial opportunities. The way we want to look on it is that we strategically partner; we’re not looking to go somewhere and take someone’s business. We’re looking for partnerships in these areas so that we can impart some of the knowledge here in the eastern Caribbean,” said Barrett.

Even with all of these ambitions, Campbell reaffirmed that the VM Group would be sticking to the realm of its core business in financial services and its non-regulated businesses. Its fintech arm VM Innovations Limited launched its PropMan platform in 2021 which is a property and community management tool that has received interest from as far as Colombia, according to VM Innovations CEO Maurice Barnes. The VM Group is also considering opportunities in Guyana, the Dominican Republic and Costa Rica.

“One fundamental thing I’d want to underscore is that our expansion is focused on our core businesses. We’re investing in businesses that we understand and in regulatory environments that we also have a pretty decent understanding,” closed Campbell.