Last-minute haggles over fixtures and fittings may have derailed Australian firm Sargon Capital’s $200 million plus bid for NZ trustee company roll-up, Complectus.
Sources close to the deal told Investment News NZ (IN NZ) legal wrangles over Complectus physical assets held up final settlement of the purchase beyond the May 31 deadline.
In a brief statement issued last week, Complectus, ultimately controlled by an Andrew Barnes-owned entity Bath Street Capital (BSC), said Sargon “did not meet its obligations under the Sale and Purchase Agreement, while BSC Limited complied with all its obligations”.
Co-founded by technology entrepreneurs Phillip Kingston and Aron D’Souza, Sargon, the holding company for recently-launched Australian trustee and superannuation administration firm, Trustee Partners, has yet to officially respond.
Prior to announcing the Sargon purchase this May, Complectus, which has bundled up a bevy of NZ trustee firms including Guardian, Perpetual and Covenant, was contemplating an IPO tipped to raise $150 million.
Barnes was not available for comment on any future listing or trade sale options for Complectus.
The aborted deal with Sargon also coincided with news that could open up further opportunities in the NZ trustee space. Last week Finance Minister, Steven Joyce, revealed new legislation that would remove the Crown guarantee for Public Trust, which vies with Complectus and Trustee Executors for dominance in the NZ trustee business.
The move was consistent with government policy that “commercial businesses should not have a competitive advantage through being Crown-owned”, the Joyce statement says.
“No other business in New Zealand that provides the same services as the Public Trust is underpinned by a Crown guarantee,” he said.
Public Trust reported about $45 billion under supervision in its corporate trustee role, covering trustee duties with six KiwiSaver providers including the single-largest scheme, the $7 billion plus ASB fund. The Crown-owned firm also manages over $470 million in a government-guaranteed common fund as well as more than $3 billion of funds or assets under management.
In total, Public Trust has just over $50 billion under supervision.
Perpetual Guardian, the main Complectus operating entity, claims total assets under supervision or administration of “over $100 billion”.
During the 12 months to June 30 last year Guardian Trust reported a profit of about $8.75 million on revenue of $43.6 million while Perpetual Trust lost $331,000 on revenue of $4.9 million.
Guardian is supervisor of 10 KiwiSaver schemes, including the $10 billion plus ANZ funds as well as AMP, BNZ and Westpac.
Trustee Partners’ Kingston was instrumental in launching ‘impact investing’ Australian superannuation fund Good Super. Tidswell, Trustee Partners licensing entity, was also appointed as supervisor to the Spaceship super scheme, formed last year with an emphasis on the technology investments allegedly favoured by millennials.
As well as managing director, Kingston, the Trustee Partners executive team features several senior staff formerly linked to the Australian arm of NZ-originated investment platform business, FNZ including: Patrick Liddy, strategic partnerships; Christina Liosis, chief financial officer; and, John Atabak, head of technology and administration.