GlobalNetFinancial.com has closed on the purchase of a controlling interest in online funds supermarket Investment Funds Direct (www.fundsdirect.co.uk). GlobalnetFinancial paid approximately £1.5 million in cash and stock, and invested a further £1.625 million in cash, for a fully diluted 50.1% ownership interest in the Farlake Group subsidiary.
FundsDirect was the first company in the UK market to establish an online funds supermarket which provides access to all UK authorised funds and the ability to subscribe for those funds online. The comany is currently rolling out its distribution of funds in each of the eleven European countries it has regulatory approval. FundsDirect claims to have written £10 million of business in its first 5 months of operation. The business model dictates that it will receive annually, on a recurring basis, a percentage of all monies that are invested through its Web site.
Sean Ewing, former group managing director of Farlake, has become the full-time CEO of FundsDirect.
The FundsDirect deal is a continuation of GlobalNetFinancial's strategy to vertically drive traffic from its financial content sites to a diversified group of partially owned online execution platforms. To date, the company has launched a number of vertical transaction execution platforms including spot foreign exchange trading via www.matchbookfx.com; an electronic offering platform for distribution of equity IPO's & equity-related securities to retail investors via the Internet found at www.eo.net; a new marketing initiative with Fleming Asset Management (www.flemingfunds.com) to launch a series of investment fund Web sites with interactive e-commerce capabilities; an insurance Web site and insurance channel in the UK, www.insurancewide.com, as well as a dynamic execution order system in the US (www.globalnetrader.com).
GlobalNetFinancial intends to promote and market FundsDirect through its network of European Web sites in the UK, Italy, France, Germany, Denmark, Holland, Scandinavia and Spain.
Commenting on the deal, GlobalNetFinancial chairman and CEO Stanley Hollander says: "In the UK, distribution of the funds will be enhanced through direct links from GlobalNetFinancial's leading financial content site, www.UK-iNvest.com, as well as being part of GlobalNetFinancial's WAP distribution relationship with BT Cellnet. Throughout the EU, we intend to follow a similar distribution strategy involving the Internet and WAP and we expect that FundsDirect will quickly become a leading online distributor of investment funds throughout the European marketplace."