Major Merger for Trustee Companies

Financial services company Equity Trustees Limited has acquired one of the country’s major trustee companies ANZ Trustees for $150 million, increasing its funds under management to $40 billion including some of the country’s largest philanthropic trusts.

The acquisition, which creates “Australia’s largest independent ASX listed company with a dedicated trustee services focus”, follows the contest between Equity Trustees, Perpetual and IOOF to take over Australia’s oldest trustee company, The Trust Company. Perpetual was successful in its bid taking complete control of The Trust Company last December.

Trustee companies manage up to 2000 charitable trusts with more than $3 billion under management.

Philanthropy expert Elizabeth Cham, who is currently writing a PhD on the role of Trustee Companies in Australian philanthropy, said the merge means less choice for Not for Profits.

She said before the 1984 deregulation of the financial services sector, there were more than 30 trustee companies – now it had been reduced to a handful of trustee companies including the two major private trustee companies.

And, she said, it was time for the Not for Profit sector to start having a serious conversation about it.

“Opposed to the four doors [Perpetual,  Equity Trustees, The Trust Company and ANZ Trustees], there are now only two,” she said.

“Now two companies will have 91 per cent of the philanthropic capital.

“For most of the sector, this money is there left for their benefit and they don’t even know it exists.”

Equity Trustees earlier this year said it distributed more than $14.5 million in 2013 to charities on behalf of the 206 charitable trusts it manages.

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

He said 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.

He said it was 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,” Killen said.

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

Equity Trustees Limited (EQT) is a publicly listed company that provides a range of financial services to corporate and private clients. Its businesses include asset management, distribution, responsible entity appointments, private client wealth management, and corporate and personal superannuation.