News Release 8/07 For immediate release August 24, 2007

Small is beautiful as credit industry reshapes for the better

When it comes to taking a calculated risk as an investor, big is not necessarily best according to one experienced New Zealand investment company.

Asset Finance – an investment company with 20 branches in New Zealand and decades of expertise – reckons the smart investors in the market will now look towards smaller companies with strong cash flows as the industry recovers from its recent global jitters.

Huge problems within many large financial companies have been exposed domestically – as well as internationally - with several companies either filing for bankruptcy or admitting they are in trouble.

"It has been interesting to see what has been happening in New Zealand,” explained Asset Finance Managing Director, Clive George. “Without even examining the international picture, it’s worth noting that there are enough examples in our own back yard that clearly demonstrate what can go wrong when finance company management take their eye off the ball."

George argues that the whole crisis both internationally and domestically has demonstrated the benefits of smaller financial companies and organisations.

"Quite clearly big is not necessarily the best," he explained. "Our investors, like those of many smaller companies, should rest assured that all loans are secured. Our ratio requirements always ensure a safety net in the unhappy and unforeseen event that a contract is not completed by the borrower.

"In our history of trading no investor has ever lost a cent from a failed contract under our management, and we suspect it will be a similar story for other smaller responsible organisations like ourselves that take the business of credit extremely seriously both from the point of view of our investors and those who we lend money to."

Kiwi investors also have the Securities Commission and the new accounting [IFRS] standards to protect them, and these do provide some stringent controls in the industry. "Our industry is certainly not a wild west market as some investors must believe."

As well as these regulatory bodies, George points to good governance, a broad base of experience and a conservative approach as being critical in ensuring any financial organisation minimises its risk. “These are the points that should be raised in discussions with any investment company. Investors will be guilty in many cases of not reading the small print, but this will change after fingers have been burned.

The safest companies are those that maintain a very balanced spread in the loan book and avoid sectors likely to have any adverse impact on trading.

As well as a more discerning investor emerging from the current global crisis, George also suggests it will mean the days are numbered for unscrupulous investment consultants.

"Like ourselves, smaller investment companies often do not accept deposits from brokers, or pay large service fees. Instead, like us, they choose to deal directly with our investors and pass those savings directly to the investor via a better than average market interest rate."

Perhaps the positive to emerge in the coming weeks and months will be a cultural change in the market so that there is finally no place for investment consultants motivated by the commission rather than the ‘mission’."

For more information contact:

Noel Braden 021 988 940

For media assistance contact:

Richard Gee 021 0271 1926