Perpetual Guardian IPO

[Hectorplains]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11685907

New blood....


Hadn't been mentioned in potential IPO dispatches?

Court action and no mention of what the listing is for (default setting - line current holder's pockets then?) are a bit of a turn off. It'll be interesting to see the numbers.

[trader_jackson]

I will most likely not be getting into this one, looks like he's seen the nzx 50 chart and wants to get some cash out... but it is very much still a developing story (as to where the money is going)

[Stranger_Danger]

Oh dear. They say that nobody rings a bell at the top, but if this thing could list, that would be fairly close.

[Subway]

Andrew has been hinting at an IPO since he merged Perpetual and Guardian, and if anything, George Kerrs legal action to hurry it up has probably helped things along (an IPO was baked into the merger/sale of perpetual).

I'm not entirely certain what investors will be looking for, it has traditional corporate trustee business which is a good money maker, but trusts/estates are a declining business

[TFA]

Andrew has been hinting at an IPO since he merged Perpetual and Guardian, and if anything, George Kerrs legal action to hurry it up has probably helped things along (an IPO was baked into the merger/sale of perpetual).

I'm not entirely certain what investors will be looking for, it has traditional corporate trustee business which is a good money maker, but trusts/estates are a declining business
Why are trusts/estates a declining business? Wouldn't estates be correlated to population growth/death rates...increasing? Aren't more and more people putting assets into trusts?

[Scooter]

Chris Lee keeps on harping on about not using Trust Companies for estates or trust administration, and the general perception on these types of companies is not overly favourable due to high costs, and bad press over the years.

[Subway]

Why are trusts/estates a declining business? Wouldn't estates be correlated to population growth/death rates...increasing? Aren't more and more people putting assets into trusts?

I don't disagree, and Trust Companies back in the day used to be the go to for getting a will written/trust established, now days, they are less popular. Cost is a big factor, these guys charge by the hour, and its not cheap.

The next issue is distribution network, Public Trust are the Trustee of last resort, so they have a great line of business executing wills and managing trusts that no one else will, and its good money, but Perpetual/Guardian don't have access to that, you need to sign up clients while they are alive, with revenue only flowing once the will is executed, basically a significant revenue lag.

The bad press Chris has been talking about have been around the alleged lack of oversight from the Corporate Trustee guys in the case of the Finance Companies etc.

[Scooter]

The bad press Chris has been talking about have been around the alleged lack of oversight from the Corporate Trustee guys in the case of the Finance Companies etc.

And also the large fees taken from estate administration being day light robbery with lack of accountability

[Jinx]

Won't be touching this with a 10 foot pole.
After 5 years of my fathers estate being with Perpetual Guardian they've made under 5% total capital gain. The sooner we can get the money away from them the better.

[GTM 3442]

Won't be touching this with a 10 foot pole.
After 5 years of my fathers estate being with Perpetual Guardian they've made under 5% total capital gain. The sooner we can get the money away from them the better.

To be fair, Jinx, I believe that the greedy-self-serving-blood-sucking-leech-vampires who seem to inhabit this part of the financial services industry do labour under some restrictions about the investment types and risks which might be prudent whilst they are clipping the ticket.

Once bitten, very,very shy.

[Jinx]

To be fair, Jinx, I believe that the greedy-self-serving-blood-sucking-leech-vampires who seem to inhabit this part of the financial services industry do labour under some restrictions about the investment types and risks which might be prudent whilst they are clipping the ticket.

Once bitten, very,very shy.

True, but last year the NZX was up roughly 10% last year and the estate (100k+) lost $2000....
I don't understand how the 'greedy self-serving vampires' can't manage to spare a few cents for the estate.

[Subway]

And also the large fees taken from estate administration being day light robbery with lack of accountability

Hey, to be fair, the high fees are what make the industry lucrative, the lack of accountability I disagree with however, if you have a trustee written into your will as the executor then they have the obligation to execute on it.

[Scooter]

Hey, to be fair, the high fees are what make the industry lucrative, the lack of accountability I disagree with however, if you have a trustee written into your will as the executor then they have the obligation to execute on it.

Completely agree, but with the financials being made public with margins, it has the potential to lose customers. In my experience the hourly rate or %age charged was massive, $250-$300 per hour for staff with little formal education, and over 5% estate administration fee

[Subway]

Think its a good time to revisit this, AFR are talking about a market cap of $200mil on http://www.afr.com/street-talk/bigger-things-in-store-for-ipohopeful-perpetual-guardian-20161105-gsizg8

What i'd be concerned about: Ongoing revenue from PCS, not entirely sure how they plan to increase revenue from this side of the business? Its a fairly static side of the business with revenue taking along time to flow through

CTS: Again, growth will need to be found from writing new business, and there is plenty of competition in this space from TEL and Public Trust

Finally, the AFR author makes a good point, a $200m valuation based on a roll up on two businesses bought for significantly less, have they really made that much in cost savings? or is it just a case of setting the price based on comparative multiples. TEL was on the block last year and allegedly IOOF and AET walked from a lower multiple...

[percy]

Oh dear. They say that nobody rings a bell at the top, but if this thing could list, that would be fairly close.

So very true.!

[GTM 3442]

Hey, to be fair, the high fees are what make the industry lucrative, the lack of accountability I disagree with however, if you have a trustee written into your will as the executor then they have the obligation to execute on it.

And charge like wounded bulls as they clip the ticket. Over and over.