The Sargon Capital-backed Trustee Partners appears undeterred by its stalled negotiations with NZ trustee company roll-up hopeful Complectus and has, meanwhile, successfully negotiated the purchase of the smaller New Zealand Trust Company and the Hong Kong Trust Company.
Sargon’s original NZ target, Complectus, however, owns FMC-licensed supervisors, Perpetual Guardian and Covenant.
Philip Kingston, the chief executive of Sargon, is sticking to his strategy of both domestic and international expansion in the consolidating trustee industry. He is also engaged in a roll-up but with the significant difference being that he believes trustee services can go global and provide extra synergy and scale benefits.
Established in 2014, the New Zealand Trust Company is a subsidiary of the Hong Kong Trust Company, headed by Carolyn Butler. Butler and fellow Hong Kong resident, Ken Deayton, are both listed as ‘key people’ with the New Zealand Trust Company along with sole NZ-based senior executive, Turama Meha.
The New Zealand Trust Company is not licensed under the Financial Markets Conduct Act (FMC) as a ‘supervisor’ (or ‘trustee’ under the old legal parlance) – a status required to provide services to funds such as KiwiSaver schemes. According to its website, the New Zealand Trust Company’s “services include trusteeship, fiduciary, registry, escrow, nominee, and custodial services”.
Complectus, which has acquired several NZ trustee companies including Guardian Trust, Perpetual Trust (no relation to Australia’s Perpetual) and Covenant, is said to have been contemplating a NZ$150 million listing this year prior to starting negotiations with Trustee Partners.
They announced the proposed NZ$200 million takeover on May 18, after Trustee Partners had obtained regulatory approval from the NZ Overseas Investment Office. But then barely a month later Complectus announced it had pulled out of discussions, citing doubts over funding.
Lawyers are still mulling the situation.
Complectus is owned by Bath Street Capital, which is controlled by Andrew Barnes, who acquired Perpetual Trust from the NZ-listed Pyne Gould Corporation.
Pyne Gould for a time was the second-largest shareholder in van Eyk Research, and sold its 36 per cent to Australasian Wealth Investments when Barnes was the chair. He resigned at the end of 2014 and returned to New Zealand after AWI booked a loss of more than $6 million from van Eyk writedowns while van Eyk was eventually placed into liquidation.
AWI has since re-capitalised under the chairmanship of significant shareholder Paul Clitheroe and managing director Ron Hodge and renamed itself InvestSmart, after its main information product line. Hodge originally founded InvestSmart in the late 1990s and sold it to Fairfax. He organised for AWI to buy it back, taking a significant shareholding in the revamped group himself.
Meanwhile, Sargon Capital’s Kingston said last week that the acquisitions provided a strategic platform to expand into Hong Kong as well as explore other opportunities across Asia and New Zealand.
“We are particularly enthusiastic about opportunities in Asia’s retirement savings and unit trust markets as well as corporate trusteeship,” he said.
Kingston founded his private equity firm Trimantium in 2008 and then co-founded Sargon, which is concentrating on financial services, with Aron D’Souza, early last year. They are both technology entrepreneurs.
Patrick Liddy, consultant with MSI Group, which is advising on implementation and operations, said Trustee Partners was looking to consolidate several areas including custody.
In association with Greg Bright is publisher of Investor Strategy News (Australia)