Saunderson House in line for bolt-on buyouts

Saunderson House in line for bolt-on buyouts

Wealth manager Saunderson House’s parent company has indicated the firm is in line to be expanded through acquisitions in the months ahead, weeks after the chief executive told FTAdviser talks were already ongoing with a number of potential targets.

Dublin-listed IFG Group, parent company of Saunderson House and self-invested pensions and platform provider James Hay, reveals in a first quarter interim management statement today (12 May) that total assets rose to £21.2bn by the end of March.

It says 2,622 new self-invested pensions were added by James Hay, compared to 1,487 during Q1 2014, while 93 clients were brought in by Saunderson House, up from 90. James Hay assets rose to £17.3bn from £16.4bn in December, while Saunderson House rose to £3.9bn from £3.7bn.

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But the firm says also is targeting buyouts to accelerate growth. “We continue to pursue both organic and inorganic opportunities to leverage the capability in our business,” the statement adds.

The acquisitive growth is likely to be concentrated in Saunderson House, at a time when there is much talk of advisory consolidation as providers seek to buy their way into distribution and ahead of next year’s ‘sunset clause’ for platform rebates, which will affect adviser trail.

IFG confirms in contrast that the growth strategy for James Hay is “primarily organic”, although it will also continue to pursue “partnership arrangements” in the second half of 2015. Following an agreement with Capita the firm has secured several agreements, including legacy books.

Paul McNamara, the group’s chief executive, commented: “IFG is strongly positioned with two profitable businesses in attractive markets and has a strong liquid balance sheet to support further growth and investment.”

Speaking after the publication of the group’s annual results, Mr McNamara told FTAdviser in March that he was already in discussions over buyouts as part of a strategy this year to be more proactive with acquisitions and ‘strategic alliances’.

During 2014, a new management strategy saw a restructuring instigated that led to the sale of five advisory arms, while one small Irish general insurance business still in the process of being sold.

Last year Saunderson House saw a 13 per cent increase in adjusted operating profit to £5.4m on the back of an 18 per cent surge in revenues. James Hay’s revenues were broadly consistent with 2013.

According to the statement published today, trading in Saunderson House has maintained momentum, with client retention continuing at the high levels seen last year.

“In addition to further investment in people, marketing and targeted brand development to grow the business, we will implement greater use of technology with a new on-line portal planned for Saunderson House clients to enhance client service and advisory relationships.

“As the year progresses, Saunderson House plans to selectively broaden its investment offer as a discretionary management service.”

Elsewhere, the trading update for James Hay confirmed the strategic shift from being solely a Sipp provider to a full platform for ‘retirement wealth planning’.

Gross inflows of £580m during the first quarter, up 50 per cent on Q1 2014, were driven in part by the increase in demand for flexible pension solutions off the back of the regulatory changes and the migration of Capita assets.