Frozen Guardian Trust fund stings ex-owner Suncorp for $4.9M
By Paul McBeth
July 17 (BusinessDesk) - Australian insurer Suncorp Group forked out an indemnity payment to New Zealand Guardian Trust
more than three years after selling its former subsidiary at a $40 million loss.
The $4.9 million payment on April 29 of this year covered the loss incurred by the Guardian CashPlus Mortgage Unit Fund
in the final partial capital repayment from the Guardian Mortgage Fund, which was frozen in 2008 as the global financial
crisis took hold, under an indemnity provision, Guardian Trust said in notes to its latest financial statements.
At the time of the freeze, the CashPlus Fund was 35 percent invested in the mortgage fund, which suspended withdrawals
of some $249 million in funds to some 3,700 investors. Guardian Trust guaranteed certain interest and principal losses
relating to the fund, and was in turn indemnified by a unit of Suncorp. the statements show.
Guardian Trust completed the mortgage fund repayments three weeks after switching to its third owner since Suncorp sold
the business in 2011. The trustee was sold to Complectus, a unit of Perpetual Trust-related Bath Street Capital and two
funds managed by Milford Asset Management, on April 7 for $68.5 million. Suncorp sold it for A$42 million to The Trust
Co, which was itself taken over last year by ASX-listed fund manager Perpetual Ltd.
The financial statements show Perpetual pulled out a $4.4 million dividend from Guardian Trust three days before the
sale to Complectus, with dividends of $2.8 million and $3 million for the 2014 and 2013 financial years paid to previous
owner Trust Co.
The trustee company reported profit of $4.9 million in the 12 months ended Feb. 28 from $3.6 million a year earlier, on
a 5.4 percent increase in revenue to $37.4 million. Net operating cash flow rose to $5.9 million from $3.4 million in
the 2013 year, leaving Guardian Trust with $7 million in cash and equivalents as at Feb. 28, and before the post-balance
date dividend payment to Perpetual.
As at Feb. 28, Guardian Trust had $2.47 billion of assets under administration and $90.49 billion of securities
supervised. The seven group investment funds it manages had a total value of $166 million at the Feb. 28 balance date.
(BusinessDesk)