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Wealth management firm raises £1.9m in bonds

Wealth management firm AFH has raised £1.9m of unsecured loan notes to assist its acquisition of adviser firms, chief executive Alan Hudson has said.

He said: “The funds will be used to accelerate AFH’s stated strategy of acquisitive growth. Selective acquisitions include both small and medium-sized IFA businesses that are located outside of AFH’s traditional core geographical locations and seeking the benefits of being part of larger organisation.”

Following the fast take-up of the offer, the board of the Worcestershire-based firm has, following indication that more applications through Sipps would be received, extended the deadline to buy its bonds until 31 January 2015.

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The bonds pay 7.5 per cent a year, with a redemption date of 12 December 2018.

Mr Hudson said: “Our ability to raise additional funding through the issue of these notes will facilitate the board’s ability to enhance earnings attributable to shareholders from future acquisitions whilst maintaining gearing, all of which is unsecured, at a conservative level.”

The bonds and the warrants are expected to be issued by 19 December 2014 following receipt of cleared funds from the noteholders.

Background

The AFH Group was founded in 1990. In June 2011, it floated on the ISDX raising £1.76m. Last year it acquired 11 adviser businesses, completing its 20th acquisition in January. In April the group raised £1.6m to fund further acquisitions, adding to a £3.3m fundraising it had completed in two stages through the second half of 2013.

In June the group announced plans to list on the Alternative Investment Market. Following two further acquisitions, the it announced in November that its funds under management exceeded £900m.