Capital G Ltd Acquired By CWH/Clarien Group

January 7, 2014

[Updated] CWH Ltd will assume the majority ownership of Capital G Limited, while Edmund Gibbons Ltd will remain involved as a minority shareholder, it was announced today [Jan 7].

CWH Limited founders include David Carrick, Robert Flohr, Zoran Fotak, Mitchell Hedstrom, Ian Truran and Keith Stock, who the company said “will play an active role in the management and strategic growth of the institution and plan to live and work in Bermuda.”

Speculation has been swirling about the company, and last month Capital G Bank confirmed that it was “in discussions with potential partners as part of its overall strategic growth plans…”

Today’s statement from Capital G Limited said it “entered into a formal agreement on 31st December 2013 to amalgamate with Clarien Group Limited, a wholly owned subsidiary of CWH Limited with continued growth plans to develop its business domestically and internationally as a world class offshore financial institution.

“Through Clarien, CWH Limited, a newly formed Bermuda exempted company will assume the majority ownership of Capital G Bank Limited, while Edmund Gibbons Limited will remain involved as a minority shareholder.

“The transaction, which received approval from the Bermuda Monetary Authority and the Government of Bermuda, places Capital G Bank in a position to build a leading offshore financial company with expertise in asset management, private banking and investment banking to clients from around the globe.

“CWH Limited founders include David Carrick, Robert Flohr, Zoran Fotak, Mitchell Hedstrom, Ian Truran and Keith Stock. Collectively they bring significant executive level experience to Capital G Bank and the newly formed Clarien Group.

“All founders will play an active role in the management and strategic growth of the institution and plan to live and work in Bermuda,” the statement added.

L-R: Keith Stock, Robert Flohr, Zoran Fotak, David Carrick, Ian Truran, Mitchell Hedstrom

CWH Limited Founders

“Mr. Stock will be Chairman of Capital G Bank, Messrs. Fotak and Truran will be Co-Chief Executive Officers, Mr. Carrick will be Chief Financial Officer, Mr. Hedstrom will be Chief Risk Officer and Mr. Flohr will be the Chief Corporate Development Officer.

“James Gibbons will remain actively involved and serve as a Director of Capital G Bank Limited.

“The partnership exemplifies the appeal Bermuda has to global investors, partners and clients. The Island’s sophisticated infrastructure, intellectual talent and accessibility to the world positions the Clarien Group perfectly to bring some of the world’s most discerning institutional and private wealth clients to Bermuda.

“It is expected that over the next five to ten years profitability of the institution will grow significantly with expansion into new lines of business and growth into new markets enabling the continued employment of Bermudian and international talent.”

James Gibbons of Edmund Gibbons Limited stated, “Today’s announcement represents a significant achievement for Capital G Bank and one of our initial goals to build, diversify and grow our business in Bermuda and other markets around the world. The investment by CWH Limited represents a commitment in Bermuda, in Capital G, its valued clients and 180 plus employees.”

Zoran Fotak of CWH Limited added, “The Gibbons Family and the management of the Bank have built a first class organization. Bermuda is a world class financial services centre.

“We share the same values with the Gibbons Family: Client Focus, Teamwork and Integrity. We are committed to a partnership that continues with the strategy that makes this Bank the best in class financial services provider to all of its clients – domestic as well as international.”

Update 4.07pm: Bios of all the CWH founders [David Carrick, Robert Flohr, Zoran Fotak, Mitchell Hedstrom, Ian Truran and Keith Stock] can be found here [PDF].

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Comments (72)

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  1. Family Man says:

    With the new capital cushion they can now recognize all the losses on those bad real estate loans. No more extend and pretend.

  2. terry says:

    This is great news.
    All those Bermudian names and families.
    Next week, Kim Chee Lang will hold a majority of shares.

    Rip Bermuda.

    • Vote for Me says:

      @ terry – the colour of money is green!

      Be careful you do not turn greem over this purchase – green with envy that is. Ironic that the Green family has invested lots of greenbacks in Bermuda recently.

    • yesman says:

      I truly hope this doesn’t lead to more redundancies.

    • terry says:

      6 dislikes.
      Wow.
      Lets see your liniage and paperwork.

    • Robert says:

      Wow terry, i would normally agree with you but that has to be the most racist comment I’ve read on this site.

  3. watching says:

    Bye Bye Bermudian Banks…

    Should we expect job development or will this take the road of HSBC which has had a steady decline in employment numbers in the last few years?

    • Family Man says:

      The alternative was a very real risk of waking up on a Monday morning and finding a “CLOSED” sign on the bank.

  4. Al says:

    So there are now no Bermudian banks?

    • Mazumbo says:

      What’s a Bermuda Bank.

      • James says:

        One that charges 6.75% on money that they buy buy for under 1%. Oh and give 1% on savings.

    • Just Wondering says:

      Butterfield Bank is still a Bermudian bank

      • Robert says:

        No my friend, it was purchased some time ago by the Canadians

        • Sandgrownan says:

          Hmmm..not true..factually incorrect.

        • Oogly says:

          20% does not a “purchase” make.

        • Just Wondering says:

          As the others have said, they have not purchased Butterfield bank they do hold a large amount of shares enough for the bank to listen to them but not enough to be the owners

          • yesman says:

            Following the recent trends, it’s probably only a matter of time before Butterfield Bank is bought.

            RIP Jobs
            RIP Bermuda Banks
            RIP The economy

            • sandgrownan says:

              It’s the other way round, the reason they need the capital injection, is because the economy is s***.

              • yesman says:

                Explain HSBC and the hundreds of layoffs since the acquisition of Bank of Bermuda.

      • frank says:

        in name only

      • Charter says:

        Controlled by CIBC: the Bermuda shareholders are there at their mercy.

  5. Vote for Me says:

    This transaction seemd to be a good sign.

    Is the group investing in Bermuda or is the Gibbons family divesting from Bermuda!! Two sides of the same coin.

    Also, who in the group has more money that the Gibbons family?? Expansion will require lots of money and if the Gibbons family could not do it, who in this group has deep pockets??

    James – you did a good job in helping many Bermudians to get mortgages when others told them no.

    Note to existing mortgage holders. You now know why there was a recent puch to liquidate all delinquent Capital G mortgages.

    • haha says:

      The Gibbons will be in Bermuda as long as they’re alive, and the group is investing in Bermuda!

  6. A Clue - says:

    A travesty of the highest order. Now Bermuda has no locally owned banks. Sadder part is that Capital G holds the riskiest mortgage loan portfolio.

    • Just Wondering says:

      Butterfield bank is still locally owned

      • Robert says:

        Its Canadian mate

        • Sandgrownan says:

          Wrong again

        • Just Wondering says:

          Nope they have a large share hold but do not have enough to ‘own’ the bank so Butterfield is still a Bermudian bank

          • Loquatz says:

            Irrelevant: they control the bank.

          • Ben Dover says:

            BNTB would have been bankRUPT had CIBC not stepped in with a capital infusion.

  7. A Clue - says:

    Find greater comfort in having foreign banks here when they are publicly traded thus have a responsibility to fully disclose.

    Its an entirely different scenario to have a bank in a market this size which is FOREIGN and PRIVATE. No obligation or responsibility to disclose. No commitment to Bermuda. No market or broad regulatory oversight.

    The Gibbons may have been a lot of things…but at heart they were and are Bermudians who despite it all truly had Bermudians and Bermuda at heart. You don’t have that here. The BMA should never have allowed this to go through particularly as the typical Gibbons client is a lot less sophisticated than the Butterfield Bank or HSBC client….The Cap G client truly needs protections..

    • Family Man says:

      I believe all banks have to freely publish their audited accounts once a year. The next set for Capital G should make for interesting reading. (Well, as interesting as bank financial statements can get).

    • Loquatz says:

      Now, Bermuda SHOULD publish information on foreclosures. That information, which is highly relevant to the real estate market, is currently utterly obscure.

  8. A Clue - says:

    And I am sure that this deal was approved by the Minister of Economic Development…Dr. Grant Gibbons…this is craziness

  9. Sandgrownan says:

    So, whose money is it?

  10. cedartree says:

    Photos like this of Senior Management teams always make me smile; we have so far to go to achieve gender/racial/age equity. Anyway, I hope the acquisition brings success to all parties and eventually works to improve Bermuda as a product to other such businesses.

  11. Oh the year has just begun and there are a lot more surprises up ahead, so just be prepared, after all there is no such thing as a real Bermudian. that went out with the last tide.

    You do it their way or take the high way and in this case, the sea bed.

  12. Hmmm says:

    A Bermudian is a Bermudian. There is no “real” about it.

  13. Your joking says:

    Believe Mr Truran was running the company before,,, and fairly well….is part of the group,,,, oh and is Bermudian whose ancestors go back to original settlers I believe,,,,

    • Your joking says:

      Wrong…..not even close….He is multi generation Bermudian…..

    • Politically Incorrect says:

      Yeah. That’s why they needed to be bailed out…

    • Your joking says:

      3 dislikes …shows some in Bermuda dislike the truth ..

  14. Politically Incorrect says:

    I wonder if the Gibbons are taking a hit on the mortgage book as part of the acquisition?

  15. Concerned Citizen says:

    Is this the OBAs “fault”? Can’t blame the PLP on this! btw, does this speak to the Gibbons ability to run a business, after all, we know the normal narrative? Lastly, Grant Gibbons is the Min of Economic development right? That means that Grant Gibbons gave the Governments approval for this acquisition to occur! That, fear friends, is a massive conflict of interest. Anybody willing to provide an “excuse” for these events, without blaming the PLP or is this just “normal” business?

    • Unbelievebale says:

      That does not mean Grant Gibbons gave any approval for anything. If it did, it must have come from the Minister of Finance as the Ministry of Finance, I’m sure, has the ability to regulate over banks. Or how about the Bermuda Monetary Authority? Stop looking for trouble.

      He is the Minister of Economic Development. Not of Finance.
      But then again, does such a thing need to be approved?

      • Concerned Citizen says:

        Read the press statement. This deal required the BMA and Govt approval. Now, FYI, it is the Minister of Economic Development who is responsible for the approval of acquisitions as the Registrar of Companies is within that Ministry. Still no conflict right?

    • Robert says:

      Wow, never thought about that !!! Well played grant

  16. Concerned Citizen says:

    Why are certain media reporting of a partnership/amalgamation when this is clearly an acquisition? I will also like to know who the ultimate beneficial owners are of this NewCo? Where is the money coming from? Who do these new directors represent?

  17. jenni says:

    I just want to no who is CWh ltd is it canada or where is this company from.

  18. Robert says:

    Another group of rich white men, here we go again !!!

    • Charter says:

      Well who do expect to buy it?

    • Investing says:

      Rich white men, that happen to be investing in Bermuda where is the issue? Would you rather the rich white men just leave keep their money out of Bermuda?

  19. Wha? says:

    Not sure if I’d be inclined to buy a used car from any of this group of six.

    • tried says:

      Luckily for you, you don’t have to. They bought a bank, not a used car dealership.

  20. Common Sense says:

    Who are Clarien Group?
    Why are they qualified?
    Why are they eligible?

    • Hmmmmm says:

      Don’t you know you’re not allowed to ask those questions? Those questions are for the other guys. The picture was released to let you know that no questions need be asked.

  21. Starting point says:

    Two are Bermudian and one is married to a Bermudian. Seems pretty good to me.

    Funny how Bermudians all boo hoo about everything foreign but If a McDonalds was built it would instantly be the number one restaurant on the island.

  22. Goalie Interference says:

    Getting a good laugh at the anti-foreigner comments. If foreigners had saved the failing banks of Greece, Ireland or Iceland without a huge taxpayer bailout, those countries would have thrown the banks’ rescuers a parade! Here, people complain that the rescuers are non-Bermudian.

    Bermuda’s recession drags on and on because Bermudians gripe at every attempt at foreign investment.

  23. SMH says:

    So what! If those of you only see colour and gender in this article than get off your mouth pieces and start demanding real education and better pareting. Stop holding yourselves back and limiting your job not career choices to construction and hotel work. Make sure your children are choosing finance in school and then tides will change. Who cares who approved this? If they had the foresight and legal yardsticks covered than why not grant permission to this merger.

  24. Mr. Meoff says:

    Well done BDA. Keep selling your a** to foreigners. This is not BERMUDA anymore, we are owned by foreigners. More job loses, more poor service etc etc. Nuff said

  25. adding up says:

    Looks kind of like a partial management buyout to me. The current (Bermudian) CEO has teamed up with a spouse of a Bermudian and another guy who has been working in banking here long enough to have status, and they have brought in three partners with impressive international experience in order to expand the business and allow the current (not so young) ‘owner’ to take a step back.

    To those bemoaning the lack of ‘Bermudian’ banks: Locally financed storefront banking elsewhere in the world died out a century ago – when the average person needed to borrow more than a couple of rich local guys could lend. It is a global economy now, and investing in that economy is how banks make money. Today, no community the size of Bermuda could have its ‘own’ bank. We were lucky to have ‘local’ banking institutions for much longer than most places, and at least BNTB retains a fairly local approach and has a significant pool of local shareholders. Hopefully the new version of Capital G will take the same approach, maybe better.

  26. Y-Gurl says:

    Glad to hear the new foreign owner will be moving here, does this mean the former First Bermuda mortgages and loans are now held by a Canadian consortium, that gives “Buy Bermuda” a whole new meaning

  27. JUNK YARD DOG says:

    It is minus 4 degrees in Canada just now, it is understandable that the six would would want Bermuda for a playground along with the rest of the Caribbean “A”

  28. bluebird says:

    REMEMBER THE GOLEDONE RULE
    HE WHO HAS THE GOLD RULES.
    What a sad bunch of ignorant racists comenting on some of the blogs
    We have to compete with the whole world now and the PLP put us in over $2BILLION dollars in DEBT.25,000 working Bermudians with 8,000 on the government payroll we cannot generate that kind of money.$2Billion but we sure can spend it.$120Million in interest alone each year.

  29. Oogly says:

    Look,Cap G. was shopping itself to foreign banks (known to everyone in the industry), but no one would bite (too many bad loans on the books), so they had to find a pack of individual investors to put in money to keep the place afloat. This is short term… bought them some time… and now these guys will try to clean the balance sheet up before selling it (finally) to a foreign bank in a couple of years and pocketing deep profits.

    Rumour has it HSBC is on the block, too… want to exit BDA. And the Canadians own 20% of BNTB, so they’ll go the way of the maple leaf soon!

    In a couple of years, Bermuda’s banking scene will look like it does on the other islands down south. RBC, Scotia and CIBC-FC holding 90% of the business. NOt sure that’s such a bad thing for customers. They are the safest banks in the world, have long histories in island banking and bring good products and systems, but still employ lots of locals.

  30. Al says:

    Can everyone please define what it means to be Bermudian when they make their statements? Remember – not one of us was actually here before 1609, so it really then becomes a game of the number of generations that your family has lived here. Personally, if you’re born here and grew up in our culture, that is what makes a Bermudian. So, for illustrative purposes, if these new owners marry and have kids here, those kids are Bermudian and then subsequently will own the bank, making it Bermudian owned within a generation. Any thoughts?

    Also, this is really positive for Bermuda. If you know anything about economics you would realize that foreign investment is almost always very positive. Let’s be positive that foreigners are bullish on Bermuda, not this constant negativity everyone battles on about. Sometimes it’s like crabs in a bucket, man I swear..

    • js says:

      you can’t erase 400 years of racial segregation overnight

      like there are 2 Bermudas there are 2 definitions of what it means to be Bermudian

      never the twain shall meet

  31. Unbelievebale says:

    All these guys are laughing at these comments while we crabs in the bucket argue over this.