Tuesday 5th August 2014
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Andrew Barnes’s Bath Street Capital has acquired the Milford Active Growth Wholesale Fund's interest in Complectus, the company formed to add Perpetual Trust to trustee company Guardian Trust, giving Milford a profit on its three month investment.
Complectus acquired Guardian Trust for $68.5 million from Australian investment manager Perpetual, a firm unrelated to Perpetual Trust, in April. The fund managed by Milford Asset Management was a 50-50 co-owner of Complectus, according to a Companies Office filing at the time. Bath Street is listed as sole owner in the latest notice.
Complectus chairman Rob Flannagan said there had been concerns that Milford could gain competitive advantage, especially from information it might have been able to glean from the company's corporate trust division. "Despite Chinese walls it was still very difficult for them and difficult for the clients to accept. It wasn't a comfortable arrangement," said Flannagan, former chief at Tower.
In a release on the Complectus website, it says the joint ownership structure had "necessitated a complex governance structure in order to ensure that Milford did not have any access to information relating to funds management clients."
Milford Asset Management executive director Brian Gaynor said Barnes had been "very determined to go to 100 percent" and made an offer for Milford's stake that was "very attractive", yielding a profit "well in excess of anything else we made in that period." While he respected Flannagan's view of potential conflicts of interest, such an ownership arrangement wasn't uncommon.
Barnes is also managing director of Complectus. Guardian Trust has some 2,800 clients, with $60 billion of funds under supervision, and $2.7 billion in funds under management. Perpetual Trust has about 2,300 clients, with $1.6 billion in funds under management.
The sale of Guardian Trust marked the fourth owner for the firm in as many years, since Suncorp sold it for A$42 million to The Trust Co in 2010, which was itself taken over last year by Perpetual. Barnes completed his purchase of Perpetual Trust for $12.3 million in January.
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