Storm brewing in trustee land
One Federal Court case puts EQT in the bargain bin.
There was little media or public reaction when not one but two private equity takeover bids – from BGH and TPG – were made for ASX-listed EQT within days of each other last week. The lack of media interest is unsurprising. Melbourne-based EQT, formerly known as Equity Trustees and not to be confused with the Swedish private equity giant currently swallowing Cleanaway, operates in an obscure and largely misunderstood corner of the country's financial plumbing.
However it won't be long before the competing private equity bids begin to arouse attention – and suspicion – in regulatory and political circles. With a market capitalisation of $570 million, EQT is a small company. Yet its ability to affect the wealth and charitable bequests of many of the top 100 members of the Financial Review Rich List, and drive up costs for a raft of major fund managers, means a change of ownership will cause massive ripples.
EQT sits on a pile of $190 billion of other people's money. Of that, $18 billion is held in its private wealth division, which manages some of the largest charitable trusts in Australia and the testamentary trusts of thousands of uber-wealthy. In that respect, EQT closely resembles a Swiss private bank, minus the tax perks.
