Tony Killen

EQT Holdings Limited (ASX: EQT), the holding company for Equity Trustees, has announced it had signed an agreement with OneVue Holdings Limited (ASX: OVH) to acquire its Responsible Entity (RE) business, which covers 27 managed investment schemes and approximately $2.3 billion of funds under supervision.

The $3.5 million acquisition^[1] will strengthen Equity Trustees’ leading position as a provider of RE services and is in line with its growth strategy targeting key fiduciary markets.

The acquisition will be funded from existing liquidity and debt facilities and is immediately earnings accretive. The acquisition is subject to certain conditions precedent and completion is expected to occur in the first quarter of 2018.

EQT Chairman Tony Killen said the acquisition was consistent with Equity Trustees’ strategy of being the provider of choice for independent fiduciary services.

“The industry trend is towards independence and, as a standalone provider of specialist RE services, Equity Trustees is a logical owner of the business,” Mr Killen said.

EQT Managing Director Mick O’Brien said the OneVue RE business was a complementary fit with Equity Trustees’ Corporate Trustee Services business.

“Equity Trustees will be able to provide expertise and efficiency and achieve further economies of scale with the acquisition of the OneVue RE business, generating value for Equity Trustees.”

Mr O’Brien said Equity Trustees had also entered a longer-term partnership with OneVue involving an agreement to outsource the administration of the Equity Trustees managed funds to OneVue.  Equity Trustees and OneVue already partner with each other to service the large number of RE clients who also use OneVue’s managed fund administration services.

“The acquisition and partnership with OneVue allow both groups to play to their strengths, for the ultimate benefit of clients and shareholders,” Mr O’Brien said.

“It is because Equity Trustees is a specialist provider of fiduciary services that we can form strong partnerships with capable industry participants that benefit all parties.”

Mr O’Brien said that Equity Trustees aimed to double its RE funds to $100 billion over the next five years, consolidating its position as the leading provider of RE services in Australia.

“We will continue to seek out opportunities to further strengthen this position and grow market share,” he said.

Responsible Entities are required under Australian law for the operation of managed investment schemes and perform a central governance and management role, allowing funds managers to focus on investment management and business development.

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[1] Equity Trustees is also required to acquire an additional $5 million in cash to meet ASIC regulatory capital requirements. It is intended that the acquired entity will be consolidated into an Equity Trustees licensed subsidiary, resulting in a consolidation of licences and a release of the majority of the $5 million before the end of FY18.

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“I am honoured that the Board has seen fit to appoint me to this position and to lead a company with such an enviable history,” said Mr O’Brien. “Equity Trustees is well positioned in our key markets and has worked hard to focus on our core strengths to maximise the value we deliver to our clients, and our investors.”

Mr O’Brien added that the Company has focussed in recent times on building foundations for growth, in its key businesses of Trustee and Wealth Services (servicing private clients), Superannuation and Corporate Trustee Services.

“Equity Trustees is a unique trusted brand with a strong, experienced leadership team and a loyal client base. As an independent trustee company, it has a distinguished history stretching back to the last century and the Victorian gold rushes, and I am proud to be a part of its future,” Mr O’Brien said.

Mr O’Brien joined the Board of the Company in July 2014. He was formerly CEO of Invesco Australia and CIO of AXA Australia and New Zealand, and held the position of Executive Director from April; he replaces former Managing Director Robin Burns in the role.

In announcing the appointment, Board Chairman, Tony Killen said: “The Board is delighted with the ongoing commitment Mick is making to the Company. In the short time he has been Executive Director he has demonstrated energetic and enthusiastic leadership of a high order, both internally and externally.”

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Robyn Burns

Listed financial services organisation Equity Trustees Limited (EQT) has agreed to acquire 100 per cent of ANZ Trustees (ANZT) for $150 million. The acquisition will be funded by an equity raising and will further enhance EQT’s position as a leading provider of trustee, investment and administration services.

The acquisition will bring a significant increase in earnings to EQT, an opportunity to further develop the company’s existing growth strategies and will see total funds under management and administration increase to approximately $40 billion. After the completion of the integration period of approximately 18 months, during which the projected integration costs will be expensed, it is expected that the acquisition will deliver at least $4 million of synergies (pre-tax).

Equity Trustees Chairman, Mr Tony Killen, said EQT had been reviewing acquisition opportunities for some time. ANZT was by far the highest quality opportunity the company had come across.

EQT and ANZ have entered into a strategic relationship for an initial period of five years, with the potential for renewal for a further five years. It is anticipated that this will provide benefits for each party: ANZ will refer clients to EQT for the provision of specialised trustee services and will work with EQT to develop a suite of banking solutions that can be offered to their traditional trustee clients. In addition, ANZ and EQT have agreed to explore other areas of mutual interest such as the development of solutions to meet the needs of ANZ clients who need access to aged care services.

“Equity Trustees and ANZT have similar histories and both share a commitment to long-term relationships. In addition to both businesses being headquartered in Melbourne, synergies already exist between the two businesses in relation to philanthropy and trust operations,” Mr Killen said.

“The two businesses combined will constitute Australia’s largest independent ASX listed company with a dedicated trustee services focus.

Equity Trustees Managing Director, Mr Robin Burns said the transition for ANZT’s clients will be seamless, as the services offered by ANZ Trustees are also among the suite of services offered by EQT.

“Approximately 60 employees will join EQT in the next few months. They will be welcomed into an organisation that will allow them to continue to provide their valued services in a business that shares the same focus and commitment to clients,” Mr Burns said.

Mr Burns said, “We will be undertaking a fully underwritten equity raising programme over the next few weeks to finance the acquisition. I am confident that it will be well supported by current shareholders and new investors. The focus for the business over the next 18 months will be to integrate the ANZT business into the existing operation, as well as continue the organic growth and development projects already under way”.

The acquisition of ANZT significantly increases EQT’s scale and reach and materially improves our ability to compete and to provide quality trustee and other services in today’s complex and ever-changing financial environment,” Mr Killen concluded.

Listed financial services organisation Equity Trustees Limited (EQT) has agreed to acquire 100 per cent of ANZ Trustees (ANZT) for $150 million. The acquisition will be funded by an equity raising and will further enhance EQT’s position as a leading provider of trustee, investment and administration services.

The acquisition will bring a significant increase in earnings to EQT, an opportunity to further develop the company’s existing growth strategies and will see total funds under management and administration increase to approximately $40 billion. After the completion of the integration period of approximately 18 months, during which the projected integration costs will be expensed, it is expected that the acquisition will deliver at least $4 million of synergies (pre-tax).

Equity Trustees Chairman, Mr Tony Killen, said EQT had been reviewing acquisition opportunities for some time. ANZT was by far the highest quality opportunity the company had come across.

EQT and ANZ have entered into a strategic relationship for an initial period of five years, with the potential for renewal for a further five years. It is anticipated that this will provide benefits for each party: ANZ will refer clients to EQT for the provision of specialised trustee services and will work with EQT to develop a suite of banking solutions that can be offered to their traditional trustee clients. In addition, ANZ and EQT have agreed to explore other areas of mutual interest such as the development of solutions to meet the needs of ANZ clients who need access to aged care services.

“Equity Trustees and ANZT have similar histories and both share a commitment to long-term relationships. In addition to both businesses being headquartered in Melbourne, synergies already exist between the two businesses in relation to philanthropy and trust operations,” Mr Killen said.

“The two businesses combined will constitute Australia’s largest independent ASX listed company with a dedicated trustee services focus.

Equity Trustees Managing Director, Mr Robin Burns said the transition for ANZT’s clients will be seamless, as the services offered by ANZ Trustees are also among the suite of services offered by EQT.

“Approximately 60 employees will join EQT in the next few months. They will be welcomed into an organisation that will allow them to continue to provide their valued services in a business that shares the same focus and commitment to clients,” Mr Burns said.

Mr Burns said, “We will be undertaking a fully underwritten equity raising programme over the next few weeks to finance the acquisition. I am confident that it will be well supported by current shareholders and new investors. The focus for the business over the next 18 months will be to integrate the ANZT business into the existing operation, as well as continue the organic growth and development projects already under way”.

The acquisition of ANZT significantly increases EQT’s scale and reach and materially improves our ability to compete and to provide quality trustee and other services in today’s complex and ever-changing financial environment,” Mr Killen concluded.

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“As the size of the nation’s savings and investment pool grows, the population ages, and the complexity of the regulatory environment, tax system and markets all increase, the need for advice and services, and the wealth to be advised on, are both growing,” he said. 

Mr Killen said that the results for the first quarter this year are comfortably ahead of last year’s – noting that in the same period last year, EQT had only two months of the aged care business it acquired and that some one-off expenses in the acquisition also impacted last year. 

“Having said this, markets continue to be volatile.  As a result, we find it difficult at this stage to be any more definitive about the first half result,” Mr Killeen. 

Managing director Robin Burns told shareholders that EQT had taken a number of significant steps in the long-term strategic development of the company. 

He said that the company had moved to being an integrated business with centralised support units supporting two revenue units, each solely focussed on the needs of one of the two client groups – private individuals and corporates. 

“The purpose behind these changes is to intensify our focus on growing in the wealth management sector, within the broader financial services industry. 

“We anticipate that the way the industry will change over the next few years will enhance the opportunity for companies like Equity Trustees, which have a history of high-quality personal services provided in the best interest of the client rather than of the company. 

“We expect to continue to see volatile market conditions for some time. Despite this, we have demonstrated over recent periods the ability to generate organic business growth in circumstances where many competitors or peers have struggled,” Mr Burns said. 

EQT’s corporate fiduciary and financial services business covers trustee and responsible entity services as well as fund distribution for co-branded and Equity Trustees’ investment products.  The private wealth services business includes superannuation services, personal estates and trusts, philanthropy, aged care services, and wealth management. 

Mr Burns said that while it will take several years for the changes the company has made to be fully felt, they spring from EQT’s history and values and also reflect our approach of focussing on the needs of clients so that the company can better deliver appropriate services. 

“These developments put EQT in a good position for growth,” he said. 

“The services we offer are going to be needed by an increasing number of Australians as they approach retirement and start to consider intergenerational wealth transfer. 

“Trustee companies are particularly well placed to pick up more business on these lines because of their extensive experience and expertise,” Mr Burns said.

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