The regulator said the new conditions are designed to address concerns about Diversa’s ability to manage risks and meet compliance obligations, and to address the heightened “inherent business risks” driven by Diversa’s complex structure and operations.
A syndicate made up of global technology investment firm Vista Equity Partners and New York-based financiers, Teddy Wasserman and Matthew Kibble, bought Diversa Trustees from the collapsed Sargon Capital in May 2020.
Then named Pacific Infrastructure Partners, the holding company has since rebranded as Certane Group.
The Australian Securities and Investments Commission (ASIC) took Diversa to court in October 2021, claiming it failed to maintain proper oversight over a banned financial adviser.
At the time, ASIC said Diversa’s practice of relying upon third parties to run many of the day-to-day operations of its fund meant it had failed to take appropriate action on the activities of the banned adviser.
Former trustee services risk manager Greg Harper has also launched legal action in the Federal Court against Diversa. He alleges the company breached the Fair Work Act when it withdrew a promised promotion following his complaints about Diversa’s “poor monitoring and oversight of its regulatory obligations”.
Performance, fee concerns
APRA on Tuesday also cited concerns about high fees and poor investment performance.
Diversa is now required to implement a plan to address “persistently high” fees and in turn improve member outcomes, and enhance its governance and risk frameworks with a focus on third party service providers.
APRA has also ordered Diversa to conduct an independent review to ensure the regulator’s concerns have been addressed.
“The inherent complexity of the independent trustee model, with one trustee having oversight over a substantial number of funds, sub-funds and products, requires significant resourcing to ensure quality member outcomes,” said APRA deputy chair Margaret Cole.
“These licence conditions set the minimum standard for governance, risk, outsourcing and oversight, and member outcomes to ensure that Diversa is in the best position to continue as a trustee in the long term.”
The Australian Financial Review approached Diversa Trustees and Certane for comment.