Equity Trustees’ ‘strategic’ Irish exit approved

15 April 2024
| By Jessica Penny |
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The Central Bank of Ireland has granted the approval of Equity Trustees’ exit from its Irish operations, with the transaction expected to be complete on 30 April.

The business is being purchased via a management buyout led by Kevin Lavery, chief executive of Equity Trustees’ Irish division, with additional investment from local MFM Capital.

According to the financial services firm, the business will be sold inclusive of cash held for regulatory capital purposes of €600,000–€700,000.

In an ASX announcement on Friday, it also confirmed that its UK business continues with the managed exit of its regulated clients and is expected to be substantially complete by the end of June.

The move followed Equity Trustees’ initial decision in August to divest its interests in both its UK and Ireland businesses in light of a strategic review.

At the time, the firm said it would write off the goodwill and management rights of $2.1 million associated with the investment in the UK and Ireland and will incur costs associated with the exit, including continuing to fund operating losses, until it is completed.

“We are advanced in assessing options to determine the best exit from our investment and we are in discussions with various parties to facilitate this process,” Equity Trustees managing director Mick O’Brien said in a statement.

Confirming the agreement reached with Lavery and MFM Capital in October, O’Brien elaborated that while the sale price had not resulted in a “premium”, it would improve the firm’s profitability and earnings per share from completion.

Moreover, Lavery said the announcement had come “from a significant amount of collaborative work”.

“This transaction will allow the Irish team to continue to partner with existing and future clients as they seek a gateway to launch funds and manage capital in Europe’s leading domicile,” Lavery said in October.

Back in August, O’Brien called the transaction “a prudent move for Equity Trustees to ensure its capital is invested across the group where we believe it can generate the greatest shareholder value”.

“Equity Trustees remains strongly focused on offering corporate trustee services in Australia, where it is a market leader and has a long track record of creating value for stakeholders,” O’Brien said.

“We intend to manage our exit in an orderly and considered manner for the benefit of all stakeholders, and we will liaise closely with market participants, clients, regulators, and employees to keep them informed.”

For the half-year ended 31 December 2023, Equity Trustees recorded funds under management, administration, and supervision (FUMAS) of $183.5 billion, an 18 per cent increase on 1H23.

The results also showed that its discontinued operations in the UK/Ireland accounted for some $5.4 billion of the total FUMAS.

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