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Fintech sustains M&A activity post-Brexit

Fintech sustains M&A activity post-Brexit

A number of large fintech deals meant August was busier than usual for mergers and acquisitions, playing down some of the post-Brexit fears.

It comes after M&A activity appeared to falter after June’s referendum vote, with only one deal of more than £100m announced in July compared with an average of between three and four a month.

Olly Laughton-Scott, founding partner of Imas, said activity in the fintech sector prevented August from being quiet.

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He said: “Despite being the traditional holiday month, August did not slow down activity in the fintech arena where the importance of technology continues to drive fundamental structural change in the financial services industry, influenced by a range of factors including regulation, changing consumer preference and the development of new services.

“With advisers appointed for the potential £5.5bn flotation of Misys, the banking software group, and several private equity and venture capital funds’ investments in the sector this month, the strength of investors’ appetite for technology and technology-enabled services right across the spectrum from start-ups, such as Stash and Wealthify, to the very largest and established groups like Misys, was very apparent.

“The technology theme also ran through many of the M&A transactions involving familiar names whose strategies are now evolving rapidly through the digital transformation of services.

“Rakuten’s take-over of the IP assets of Bitnet Technologies is a case in point and Aegon’s acquisition of Cofunds possibly another.”

In the financial advice sector, perhaps the largest deal of August Aegon’s £140m purchase of Cofunds, which included the Investor Portfolio Service platform as well as Cofunds’s retail and institutional business.

Meanwhile Old Mutual agreed to sell its Italian wealth arm, which manages €7bn (£5.9bn) of investments, to Cinven-owned ERGO Italia for €278m (£236m) and its wealth arm bought Beaumont Robinson, an IFA with more than 850 clients and around £250m in assets under advice.