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FISA Heritage Newsletter # 10 – A name that withstood the wave of consolidation

A name that withstood the wave of consolidation
One of the few fiduciary companies that still operates under its original name is African Mutual Trust Company. Based in Paarl, the company was formed in 1900 in the Boland town of Malmesbury.

In the early 1900s many small fiduciary companies were founded in smaller towns throughout South Africa and especially in the Cape. Erik Troost, a FISA member and MD of African Mutual Trust Company, says that no doubt the hardships of the Boer War contributed to the need for care to be taken of the widows and orphans of war victims.

There were sometimes two fiduciary companies in a town – one a board of executors and one a trust company – and they competed with each other.

Erik describes how the politics of the era after the Union of South Africa was created in 1910 was sharply divided into United Party supporters on the one hand (“Saps”) and National Party supporters on the other (“Nats”). The competing fiduciary companies tended to cater either for Saps or Nats!

All that changed in due course, and in the 1960s and 1980s in particular, there was a wave of amalgamations and consolidations of smaller trust companies and boards of executors into larger entities, which grew into the larger institutions that we know today. This trend was driven partly by the need to build scale and cost-efficiencies and to have access to technology.

There were broadly speaking two main trends – the English-speaking companies were largely amalgamated into the Syfrets/Old Mutual grouping which from a fiduciary perspective became BoE Trust and now Nedgroup Trust; whereas the smaller Afrikaans trust companies and boards of executors, especially those in the Boland, were absorbed into the Paarlshe Afrikaanshe Trust Maatskappy Beperk based in Paarl which was the economic hub at that time of the Boland (a position overtaken now by Stellenbosch). This was the forerunner of what grew into what became Boland Bank, absorbing many of the smaller fiduciary practices in rural towns – in turn to be bought by BoE in the 1990’s. Santam, which was also in short term insurance at that time, was a large player in the fiduciary business in the Sanlam stable. Santam’s fiduciary business grew into Bankorp which together with Volkskas Trust became Absa Trust.

Some of the smaller companies retained their names, at least on paper, and were named as executors in people’s wills. Erik Troost said that when he bought African Mutual Trust Company from Nedbank in 2003, it had been dormant for some years but he decided to retain the name and revive the business. So a company that was founded in 1900 is still operating under the same name, a rare occurrence in the veritable maze of name changes and consolidation in the fiduciary industry over the past century or so.

Anyone wanting to trace the details of exactly who bought whom will have a real task on their hands – but the point is that most of these companies regardless of their origin eventually became members of the Association of Trust Companies (ATC), with high standards of governance and a common vision. The ATC was founded in 1932 and operated until 1 June 2008 when FISA formally “took over the book”.

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