Gilbert swoops for stake in funds firm sold by SLA
Martin Gilbert chairs the fast-growing AssetCo
AssetCo, the acquisition vehicle chaired by Martin Gilbert, is buying a 30% stake in B2B fund investment and advisory platform Parmenion Capital Partners which has been sold by Standard Life Aberdeen.
Parmenion was acquired by funds managed by Preservation Capital Partners in a £102m deal.
AssetCo has reached agreement with Preservation to acquire a stake in Parmenion in a cash deal worth up to £27.8 million. This will be via a payment of £20.6m on completion and up to £3.6m due in each of March 2022 and March 2023.
The acquisition is conditional on approval by the FCA to the change in controller, which is expected to occur by the end of September 2021.
Parmenion is FCA registered and services about 1,100 adviser firms and 2,600 financial advisers The company was founded in 2007, employs 211 and is headquartered in Bristol.
Parmenion manages approximately £9 billion of assets under management and has delivered strong AUM growth, with average growth in annual net inflows of around 26% since 2015. This compares to the overall adviser platform market growth of circa 14%.
In January 2016, Parmenion was acquired by Aberdeen Asset Management and on Wednesday this week (30 June) funds managed by Preservation Capital Partners acquired 100% of the equity in Parmenion from Standard Life Aberdeen.
For the financial year ended 31 December 2020, Parmenion’s audited statutory accounts reported revenue of £29.8 million and an operating profit of £1.0 million before certain non-recurring items.
As at 31 December 2020, it had net assets of £10.8m and had £15.9m of cash on the balance sheet. In the current financial year Parmenion continues to demonstrate robust growth.
Following completion of the acquisition, it has been agreed with Preservation Capital Partners that Gordon Neilly, an adviser to AssetCo and former global head of strategy and corporate development at Standard Life Aberdeen will join the board of Parmenion.
AssetCo’s board believes there exist significant opportunities to develop the business of Parmenion further, both organically and inorganically, including deepening its relationship with existing customers and growing its customer base, through on-going technology innovation and by broadening its discretionary fund management and platform offerings to meet customer demand.
The intention is that AssetCo, which recently acquired Edinburgh-based Saracen Fund Managers, will finance the initial consideration for Parmenion from internal cash resources and marketable securities currently held, totalling £31.6m.
In time, it is anticipated that the company will raise additional equity capital further to the permissions granted by shareholders at the general meeting held in April 2021.
Peter McKellar, deputy chairman and CEO of AssetCo, commented: “Parmenion is a market leading investment and advisory platform. The business has a great opportunity to build on its strong IT and client focused foundations, given the digital transformation we are seeing within the asset and wealth management industry.
“The company has the people and expertise to grow and to continue to deliver for advisers and customers, as they seek to achieve their long-term investment objectives.
“Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers.
“It is intended that this will be achieved through the acquisition, primarily, of majority stakes in selected businesses which play into these structural shifts and supported by strong distribution to drive organic growth.
“Few businesses will divert us from this approach, but we were compelled by Parmenion’s market positioning, strong growth potential and excellent management team and on this occasion we are delighted to have secured a significant minority interest in conjunction with Preservation Capital Partners.
“We are looking forward to working with Preservation Capital Partners and the Parmenion team in building the business and delivering value to investors and AssetCo’s shareholders.”