Just before Christmas last year Australian back-office ‘disruptor’ firm, Sargon Capital, took another bite of NZ.
Sargon, embroiled in a failed – and ultimately litigious – $200 million plus bid for Perpetual Guardian parent firm Complectus in 2017, bought Auckland-based Heritage Trustees for an undisclosed sum late in December. The Australian group also bought a smaller trustee operation, the New Zealand Trust Company, in October 2017 soon after the Complectus deal soured.
Heritage, a trustee company with a chequered past, recently reinvented itself as full-blown supervisor vying for corporate business against the big three of Guardian, Trustees Executors and Public Trust. It is understood Heritage has yet to land any licensed supervisor gigs but the firm has signaled its ambitions with the hire of former Public Trust head of client services, Lloyd Wong, and Stephanie McGreevy, previously of Foundation Trust (a Perpetual Guardian possession).
Mel Hewitson, ex Trustees Executors head of governance, also joined the Heritage board last April.
Over the last couple of years Heritage has been a loss-making enterprise, racking up a deficit of $1.5 million over the 12 months to March 31, 2018, and down about $280,000 in the previous annual period. Since 2017, former Heritage owners – Edward Russell (via Cargill Ltd) and Vaughan Stanley – have tipped in almost $5.5 million in capital to shore up the firm. Russell, also Heritage managing director, bought the business in 2014 with Vaughan acquiring about half of the shares in 2017.
Heritage is now 100 per cent owned by Sargon Heritage, a NZ entity ultimately controlled by the Melbourne-based SC International Holdings.
In a letter dated December 20 last year, Russell told Heritage staff that after buying the business “I have worked with you to strengthen the services we provide to our clients, in addition to the systems and processes that underpin our business and service”.
“As we plan for the future, it is important for our clients and all of you, that we take steps to ensure the long-term viability and success of the business,” Russell says in the letter. “…I am firmly of the view that this acquisition by Sargon will only enhance the reputation and credibility of Heritage, giving the company the corporate shareholding support it needs to secure its longevity.”
Stuart Howard, the recently-appointed Sargon NZ chief executive, has joined Heritage in Auckland as a senior manager following the takeover.
Sargon’s plans for its new NZ asset remain unclear: neither Russell nor Sargon were available for comment.
However, the group has been on a big shopping spree of late buying superannuation trustee unit of the ASX-listed OneVue for A$45 million the same day as it sealed the Heritage deal. Earlier in December Sargon also completed the buyout of ASX-listed robo-advice firm, Decimal. Last September the group purchased AET Corporate Trust – an ancient Australian trustee business – for A$51.6 million.
According to the Sargon website, the firm – established in 2013 by Philip Kingston and Aron D’Souza – has received “backing from significant global investors”. The Sargon board includes an array of offshore investment banking types including Andy Wang, from China firm Taiping Capital, and Teddy Wasserman, founder of the US private equity Cloverhill Group. Renowned technology investor, and global NZ citizen, Peter Thiel, was previously linked to Sargon.
About A$40 billion of assets are now “powered” by Sargon, the group’s website says, as it continues on a mission “to build better financial infrastructure to simplify the launch and growth of investment funds”.