Listing touted for Guardian
A stock exchange listing is being touted as an option for the merged Perpetual and Guardian Trusts, although their owner is pouring cold water on the idea.
The trustee companies provide wealth and estate planning services, a sector seen as attractive as KiwiSaver funds grow and the population ages.
Guardian Trust is now under the sole ownership of businessman Andrew Barnes through his company Bath Street Capital, after he bought out co-owner Milford's Active Growth Wholesale Fund this month.
Bath Street also owns Perpetual Trust.
Market sources say an investment bank has been appointed to advise on a potential public share offer for the businesses.
Barnes said the idea was "probably without foundation".
"I'm glad you've heard that because I haven't," he said. "I haven't made any decisions. I've only just bought the asset back and I'm on leave."
Companies Office records suggest BNZ provided debt finance to Bath Street Capital relating to the Milford deal. It is understood further long-term finance was provided by a third party.
Barnes said he was on the lookout for other acquisitions in the New Zealand trust sector.
Rival firm Trustees Executors, 95 per cent owned by Switzerland-based investor John Grace, is said to be on the block with options being sketched out by investment bank UBS.
"I don't know whether it is officially on the market or not," said Barnes. "At this stage there's no clear [trust] business that's for sale, but obviously were one of the other trust companies to go on the market we'd be interested in looking at it."
Trustees Executors had a particularly profitable year last year after receiving $24 million in cash from an unspecified legal settlement. The money was immediately paid out in a dividend to its owners.
Revenue for the year to September 2013, mostly from fees and commissions, was $31.6m, generating a net profit of $30.98m, including the settlement.
Guardian Trust is of a similar
size, reporting revenue of $37m and net profit of $4.9m for the year to February.
When Barnes and Milford bought it in April the purchase price was $68.5m.
Although Guardian and Perpetual must remain separate legal entities under current legislation, Barnes said the operations of the two were being merged.
The process inevitably involved job losses, he said, and "there is going to be the odd issue that drops in when you are doing significant restructures, but the net result is we will have a business with more modern systems producing a better quality product."
Guardian's previous Australian owner - an unrelated ASX-listed company called Perpetual - had not invested in the business for many years and its service levels were poor as a result, said Barnes.
"That's not a comment on the staff, it's a generality of the difficulties in a business that was owned offshore and hadn't been that important as far as its overseas owners were concerned."
- Sunday Star Times