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GDG halts trading amid rumours hinting at a Lonsec acquisition

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A trading halt all but confirmed Generation Development Group’s reported acquisition of the shares in Lonsec it doesn’t yet hold.

GDG announced a trading halt to the ASX on Thursday, citing the reason as "finalising and executing a potential acquisition and associated capital raising".

The firm, which currently holds a 49.2 per cent stake in Lonsec, said the trading halt would continue until the earlier of the release of an announcement and the commencement of normal trading on Monday, 3 June.
“GDG confirms there is no other information necessary to inform the market about the trading halt,” the firm said.

A day prior to this announcement, The Australian Financial Review’s Street Talk reported that GDG plans to buy the remaining shares in Lonsec.

InvestorDaily reached out to both Lonsec and GDG for comment, but did not hear back by the time of publication.

Last month, GDG – which owns Generation Life – reported a 29 per cent boost to its funds under management from $2.5 billion in March 2023 to $3.2 billion a year later.

The firm also reported exceptional growth in Lonsec’s FUM, which in March stood at $10.4 billion – a 27 per cent increase over the preceding 12 months.

Back in 2022, Lonsec acquired an Managed Discretionary Account provider to high-net worth individuals and affluent retail clients, Implemented Portfolios (IPL).

At the time, the firm stated that its acquisition of IPL increases its FUM to over $5 billion, diversifies its business, and has a positive impact on its earnings and margins before synergies are realised.

Lonsec CEO Mike Wring assured at the time that the purchase would not distract from Lonsec’s core business activity of research and ratings through the business units of Lonsec Research and SuperRatings.

“Lonsec is used for research and ratings by hundreds of fund managers, super funds, and thousands of advisers every day,” Mr Wright said.

“Importantly, to maintain its independence, Lonsec reaffirms its commitment not to issue retail managed funds.”

GDG is expected to issue an ASX update as soon as this week.

Maja Garaca Djurdjevic

Maja Garaca Djurdjevic

Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.