Following the collapse of its legally-fraught takeover bid for NZ trustee roll-up, Complectus, Australian firm Sargon Capital has embarked on alternative expansion plans this side of the Tasman via a recently-acquired subsidiary.
Sargon Capital, which operates the Trustees Partners firm across the Tasman, has begun its assault on the NZ back-office market with a search for a new chief executive for the New Zealand Trust Company (NZTC) – the Auckland-based boutique family trust affair it purchased this August.
NZTC is itself an offshoot of the now Sargon-owned Hong Kong Trust Company.
In a statement, Sargon says the prospective NZTC chief would have a “mandate is to expand the business significantly in New Zealand”.
“The NZTC CEO will report into Sargon CEO Phillip Kingston and has a wide mandate to acquire bolt-on trustee companies and roll-out an aggressive hiring programme,” the statement says.
In conjunction with Trustee Partners and the Hong Kong Trust Company, NZTC would be able to “provide full service trustee, supervisory and custody services across the region”, according to Sargon.
The statement says the company’s broad offering is targeted at large institutions that may prefer to “work with a single partner in the region”.
“… and our global custodians, asset managers, consultants and platforms brings a high-quality, streamlined offering to local players in New Zealand, as well as a single point of accountability and technology platform across the region,” Sargon says.
Kingston said the NZ market was primed for growth with “favourable industry and demographic trends” while its reputation as “an emerging entrepreneurial hub” supported innovation.
“There’s currently very little competition in the trustee market in New Zealand,” he said in a statement. “We’d like to make innovative, accessible and affordable fiduciary services available for everyone in New Zealand.”
The Financial Markets Authority lists six NZ licensed trustee firms (now officially known as ‘licensed supervisors’), which whittles down to four ultimate entities: Anchorage Trustees (retirement village specialist); Trustees Executors; Public Trust (which owns Permanent Trustees); and Complectus.
After making a reported $200 million bid for Complectus – a blended family of NZ trustee firms including Perpetual, Guardian and Covenant – this May, Sargon backed out of the deal at the last minute claiming whistle-blown concerns about the business.
The deal, formally conducted with BSC Ltd – the legal vehicle of ultimate Complectus owner, Andrew Barnes – subsequently triggered a raft of legal actions from both parties. BSC Ltd is seeking about $50 million in damages while Sargon says it has counter-claimed for “the return of the deposit and transaction costs, among other losses”.
“It is also bringing claims against Andrew Barnes, Mark Perrow and Patrick Gamble for their involvement in the alleged misrepresentations made,” Sargon says in the statement.
In August NZ private equity firm Direct Capital entered a convertible loan agreement with Complectus that included an option to take a 50 per cent equity stake in the firm.
Sargon has hired Derwent Executive to find the new CEO for NZTC.