Perpetual sells division to RBC
Perpetual Trustees has sold its custody and investment administration arm to the Royal Bank of Canada’s Royal Trust Global Securities Services.
Under the terms of the deal, Royal Trust will acquire Perpetual Funds Services' (PFS) $76 billion client assets under administration for $30 million.
Perpetual managing director Graham Bradley says the deal recognises the realities of global competition, and the growing trend towards the outsourcing of securities administration.
"The past 12 months has seen a lot of consolidation amongst the major players in funds management," he says.
"Groups are now larger in profile than a couple of years ago and those groups are looking for wider services... including services that are effectively banking."
The PFS and Royal Trust transaction is the result of a six to nine month review of the Perpetual business, looking at ways to strengthen the business for the long term. Bradley says the Royal Bank of Canada (RBC) proposal was viewed as the best offer for both clients and staff.
Royal Trust Global Securities Services senior vice president José Placido says the RBC identified a gap in what he calls the "third time zone", Asia Pacific. The PFS acquisition now positions Royal Trust to expand its service offerings in Australia and throughout the Asia Pacific region.
"They [Perpetual] are a committed and cultural fit and aligned to how we do business," Placido says.
All 300 Perpetual staff affected by the deal will be offered positions by the Royal bank. The deal is expected to settle by 31 July, 2001 subject to conditions including regulatory approval.
Bradley says the acquisition will add a stronger competitor to the market place and could possibly instigate further movement on the custody scene.
"We feel that this transition has potential to accelerate the local market."
"There may be a number of companies reviewing their structure as a result of this announcement," he added.
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