The Andrew Barnes-backed trustee company roll-up, Complectus, has returned once more to the sale-yard, appointing Melbourne advisory firm Flagstaff Partners to shop the business around.
In release last Friday, Complectus confirmed earlier media reports it had hired Flagstaff “to advise on possible opportunities in the Australian market”.
“The Complectus group of companies is trading extremely well and is looking at opportunities in the Australian marketplace,” the release says.
Barnes had previously lined up Complectus for an IPO before an aborted $200 million trade sale to Australian ‘disruptor’ Sargon Capital ended in tears and lawyers. As reported elsewhere this week, Sargon has allegedly found a new owner following a collapse into administration.
According to Australian media reports, the latest Complectus sale would likely centre on the corporate trust business – Guardian Trust and Covenant. The group, compiled in a series of Barnes-led buyouts starting in 2014, also includes, among others: personal trust arm, Perpetual Guardian; digital wills firm, Footprint; investment manager, Openly; and, online charitable donation website, Givaealittle.
Collectively, Guardian and Covenant have more than $230 billion in funds under supervision. Guardian has a client book that includes the four largest KiwiSaver providers.
The underlying Complectus companies reported annual revenue of just over $49 million over the 12 months to June 30 last year, according to the latest accounts, for a net profit of about $10.3 million.
Personal services contributed $30 million in revenue with the corporate trustee business tipping in the remaining $19 million during the 12-month period.
Complectus has also made changes behind the scenes to clearly separate the personal and corporate trustees businesses. Last October the group successfully applied to the High Court to bulk transfer Guardian’s 1,303 private trust clients and 887 estates to the care of Perpetual.
The ruling notes: “Perpetual and Guardian are in the process of rationalising the services they provide to private clients. This will involve Perpetual assuming responsibility for all trusteeships and other fiduciary responsibilities presently held by Guardian on behalf of private clients.
“Perpetual and Guardian consider this proposal will operate to their own advantage and will also provide benefits to existing clients.”
Furthermore, during the 2019 financial year NZ private equity firm, Direct Capital, emerged as half-owner of Complectus after exercising a convertible loan issued in 2017 in a deal that valued the company at almost $130 milliion.
“On 26 June, 2019, Direct Capital Limited exercised their option to convert their convertible loan note in favour of Coulthard Barnes Holdings Limited for $64.0M to ordinary shares in Complectus Limited,” the accounts note.
Coulthard Barnes is majority-owned by Bath Street Capital – controlled by Andrew Barnes – with Complectus executives Patrick Gamble and Mark Perrow filling out the register.