IOOF Holdings Limited has entered an agreement to sell its fully owned subsidiary, AET Corporate Trust, to financial technology and infrastructure company Sargon for $51.6 million.
AET Corporate Trust has approximately $30 billion of funds under supervision and the move by IOOF follows the firm’s governance, culture and conflicts of interest management coming under scrutiny at the Royal Commission into Misconduct in the Banking and Financial Services Industry.
Sargon chief executive Phillip Kingston said Sargon and AET Corporate Trust were a “complementary fit”.
“During the past two years Sargon has made a number of strategic acquisitions to bolster our capability and scale in trustee and custodian services, to ultimately deliver the best possible outcomes for our clients,” Kingston said.
“Each of the companies acquired by Sargon ultimately use our proprietary infrastructure and technology to deliver an intuitive, seamless and efficient experience for their clients.
“Through a powerful combination of technology and industry experts we’re helping our clients navigate regulatory complexity, as well as mitigate security and compliance risks so they can focus on growth.”
Completion of the acquisition is contingent on customary transaction conditions and is expected by the end of October 2018, Sargon said in a statement.
IOOF said it will retain its AET Private Trust business, which it said is a core part of its diversified business model that focuses on private client trustee services, estate planning and compensation trusts.
“The provision of corporate trust services to the financial services industry is a specialist area that sits outside IOOF’s advice-led wealth management focus and is a stronger strategic fit with Sargon,” IOOF managing director Christopher Kelaher said.
“The retention of the AET Private Trust business allows IOOF to focus on our retail and private client business, offering a full suite of financial solutions for our clients.”