Equity Trustees is conducting a review of its business in the UK and Ireland.
In a statement to the Australian Securities Exchange (ASX), the firm said it is considering the future of the business in these countries.
The firm said it is “reviewing its investment in the UK and Ireland and exploring the future of the businesses” and is wary of the need for future investments and costs.
Equity Trustees managing director, Mick O’Brien, said: “While the businesses are now well established with valuable licences, great teams, and a solid foundation of clients, the regulatory environment continues to intensify and competition has increased significantly, leading to increased costs and pricing pressure and requiring further investment.”
The firm launched in the UK in 2017 and subsequently into Ireland in 2019. Its services in the region focus on providing a range of fund services to international and domestic investment managers, distributors, and financial services professionals who are looking to establish and operate funds in the UK and Europe.
There had been previous speculation that Equity Trustees is looking to offload the UK business to fund administration business Apex Fund Services, but the statement said this is not the case.
“We are reviewing all our strategic options, however, no decision has been made and we will keep the market informed in accordance with our continuous disclosure obligations,” said O’Brien.
This is not the first time the firm has flagged issues in the UK and Ireland businesses with its 2022 annual report, released to the ASX in September 2022, also noting a “challenging regulatory environment” existed in the space.
It said Equity Trustees has 11 clients and oversees £3.3 billion ($6.1 billion) in funds in its corporate trustee service in the UK and Ireland.
“The regulatory environment continues to intensify, particularly in the UK where the FCA [Financial Conduct Authority] has set higher expectations for the authorised corporate director industry. This requires increased investment in resourcing and capability over time, representing both an opportunity and a challenge for industry
participants as well as an increasing need for scale,” it said.
“The business will further assess the regulatory developments and market dynamics in the Australian, UK, and Ireland markets while considering how best to optimise its business model.”
Last August, the firm announced it would acquire Australian Executor Trustees from Insignia Financial in a deal worth $135 million.
