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True Potential profits from US private equity deal

True Potential profits from US private equity deal

True Potential has received a “significant” investment from US private equity firm FTV Capital.

According to David Harrison, managing partner of Newcastle-headquartered True Potential, which was founded in 2007, the sale of the minority shareholding - for an undisclosed sum - represented a great opportunity to reward the firm’s partners and to invest in the business.

There are 138 partners, who will all receive a share of some of the capital as a result of the deal.

This would “mean a lot to many partners”, he explained, some of whom had mortgaged their homes in the early days of setting up shop in order to fund their now-profitable businesses.

Mr Harrison described this reward as ‘de-risking’ the partners personally and ensuring they were aligned with the interests of both their clients and of True Potential itself.

Moreover, he said the expertise and reach of FTV Capital - which has a strong specialism in financial services - in the US and elsewhere would lend itself to interesting growth and development prospects for True Potential.

Daniel Harrison, senior partner of True Potential, said: “FTV Capital has the digital reach that could help us achieve our next phase of digital innovation.”

He added True Potential was not ruling out a move into the US market as the deal, which will also see FTV Capital partner Brad Bernstein and FTV Capital principal Kyle Griswold join the board of True Potential, could open new and bigger markets for the True Potential wealth platform.

The move has quashed market speculation that True Potential was up for sale or about to embark on a stock market listing.

Mr Harrison said: “We have no plans to list. The market seems to push firms towards an exit either by selling to a trade buyer or listing.

“With a trade buyer or strategic buyer, you could get a much higher price than the price at which we sold a minority shareholding to FTV Capital, but that comes with the price of losing independence.

“We did actually turn down much more money to retain our independence.”

He also stressed that True Potential did not need the money to keep going, as it was already “highly profitable” but that the deal would help the Newcastle firm to “tap into FTV Capital’s expertise and success in growing wealth and asset management businesses”.

The deal was brokered by US investment bank Berkery Noyes.

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