28 Sep 2012

FMA approves Perpetual in new ownership

9:02 pm on 28 September 2012

Perpetual Trust's corporate trust division has been acquired in a management buy-out by a new licensed corporate trust business, Foundation Corporate Trust.

Perpetual's corporate trust head Matthew Lancaster will lead the new entity which will supervise funds across a range of different sectors.

Foundation Corporate Trust has been granted a four-and-a-half year term licence by the Financial Markets Authority to operate as a corporate trustee.

Foundation's independent chairman Sam Maling says the trust will operate well in the regulatory environment.

The trustee sector has been tarnished by its involvement in the collapse of the finance firm sector, which has cost investors more than $4 billion in lost income, prompting greater regulatory scrutiny.

Many of the well-known players, including Public Trust, Covenant Trustee, New Zealand Guardian Trust and Trustees Executors, had been already been accepted by the regulator.

But the fate of Perpetual - which was the trustee for a number of failed finance firms - and its owner, Pyne Gould Corporation, was recently caught up in legal action over related party loans.

John Atkin is the chief executive of Australia-based The Trust Company, which bought Guardian Trust for $42 million last year.

Mr Atkin says greater regulation and more effective enforcement helps restore confidence, but trust needs to be earned not commanded.

He says his company also benefits from focusing on just supplying trustee services in Australia, New Zealand and Singapore.