Tower Trust Services (TTS) and its sister company Trustees Executors (TEA) are to merge their funds management business.
While Tower had considered merging TTS and TEA for more than three years one of the catalysts for the move now is the resignation of TTS managing director Peter Fredricson.
He has resigned to take up a position with Merrill Lynch. Merrill Lynch (formerly sharebroking firm Hendry Hay Macintosh) is expected to make major moves in the personal investment area.
Jim Minto will assume the managing director's role for both TTS and TEA.
He says a raft of initiatives have been going on behind the scenes at Tower and the merger is aimed at achieving better economies of scale, maximising value and improving overall excellence.
"The funds management industry is screaming out for rationalisation, but it hasn't been happening," Minto says.
As part of the rationalisation TEA, which closed four funds recently, is also to close another four funds. This time it is closing its four New Zealand and Australian equity funds.
The only real product duplication in the merged fund line up is Tower's Global Equity Fund and the GAM Global Gateway Fund promoted by TEA.
However, Minto says people going into the Gateway fund are buying in to access the abilities of international manager GAM.
Minto says while TEA is moving out of the funds management provision business it will be sticking with all its other businesses, including wholesale custodian, trustee and personal portfolio services.
The merger brings together two ranges of good products and it allows the companies to focus on investment in technology and people.
Minto says there will be no redundancies in the merger.
Tower Trust Services (TTS) and its sister company Trustees Executors (TEA) are to merge their funds management business.