The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamas-based financial services provider yesterday said its next target is adding a private bank to its growing family, following the successful completion of two Cayman acquisitions.

David Kosoy, Sterling Financial Group’s chairman and chief executive, told Tribune Business that the purchase of Caledonian Trust (Cayman) and Caledonian Directors would unlock synergies with its existing Bahamas-based business.

He explained that the deal provided jurisdictional diversity for Sterling Financial Group, and the ability to “cross sell” to clients its Bahamian and Cayman-based products.

The group’s existing funds and investment advisory/corporate services business could now be married with the trust business acquired in Cayman, with Mr Kosoy hailing the deal as “very synergistic”.

“We do so much stuff here, and now we have the option to go into two different jurisdictions and do a lot of cross-selling to our clients,” the Sterling Financial Group chairman told Tribune Business.

“The Directors business there is very good, and it gives us the ability to do that. It’s [the acquisitions] very synergistic.”

Mr Kosoy said the information technology (IT) platform offered by the two Cayman businesses was first class, and could ultimately be turned into a separate business venture by Sterling Financial Group.

“The employees there, and the intellectual capital there, is good,” he told Tribune Business. “The IT they have is second to none, which we can really go after and even make that a business.”

Hinting that Sterling Financial Group remained in expansion mode should the correct opportunities arise, Mr Kosoy said the next acquisition target would likely be a private bank - the one asset that remains before it effectively becomes a full financial services provider.

“It’s still our goal to have a financial banking unit, and we’ll work on that opportunity next,” he revealed to Tribune Business, revealing that the target would be a private, rather than commercial, bank.

Mr Kosoy said Caledonian Trust already had some $9.8 billion in assets under administration, providing a strong platform from which Sterling Financial Group can seek to expand the business.

“It’s a very profitable company, and I think the timing was everything on it,” he added of the purchase. “That’s how we could get it.”

Mr Kosoy said the deal took five-six months to close, and he emphasised that the two Caledonian entities acquired were NOT those named as defendants in a lawsuit brought by the US Securities & Exchange Commission (SEC).

Both Caledonian Trust (Cayman) Limited and Caledonian Directors have been renamed as Sterling Trust (Cayman) and Sterling Directors, and will continue to offer trust, corporate, directorship and other fiduciary services.

As for its Bahamas business, Mr Kosoy said Sterling would continue to focus on real estate investment and development opportunities.

“I’m having a meeting [yesterday] with a very prominent international developer, and am going to a property in Eleuthera that we own,” he told Tribune Business.

“There is another big thing in Abaco that we will be announcing shortly. That is under contract.”

Sterling Financial Group, and its investment funds, also financed the acquisition and redevelopment of West Bay Street’s former Nassau Palm into the Holiday Inn property that is set to re-open this summer.

Extolling the virtues of the Cayman Islands, Mr Kosoy added: “The intellectual capital in Cayman is very good and deep because they allow professionals from outside Cayman to come on and work as lawyers, accountants and advisers.

“More than half the population are expatriates. There is very little unemployment because the expatriates bring the employment.”

Mr Kosoy pointed to studies showing that for every expatriate worker, three more jobs were created.