Nutmeg sells £24m stake to Hong Kong advice firm

Nutmeg sells £24m stake to Hong Kong advice firm

Hong Kong independent financial advisory firm Convoy has become the biggest investor in digital wealth manager Nutmeg, following a £30m funding round.

The Hong Kong firm accounted for £24m of the total figure, opening "the door to expansion into Asia", Nutmeg said in a statement. 

Johnny Chen, senior adviser to Convoy and former Greater China chief executive of Zurich, will take a seat on the Nutmeg board.

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Others investors in the latest funding round included existing backers Schroders, Balderton Capital, Pentech, Armada Investment Group and Nigel Wray.

The company said the new capital would be used to "expand the product offering and rapidly scale the UK business".

In particular, it would be used to develop new investing options, new tax wrappers and further developing the advice arm.

Ng Wing Fai, group president of Convoy, said: “What we’re most excited about is Nutmeg’s mission to democratise wealth management while delivering sustained investment performance and a seamless customer experience.”

He said his firm would "deliver the Nutmeg experience to an even greater number of customers in the near future".

Nutmeg chief executive Martin Stead said he was "delighted" to welcome "our friends at Convoy to our board".

"Convoy shares our huge ambition for the Nutmeg business and, with these new funds, we will be able to further scale and expand our business, bringing smart online investing and advice to more people," he said.

Since 2011, Nutmeg has attracted a total of £59.4m in investment. Since its launch in 2012, it has built around £500m assets under management for upwards of 20,000 customers.

Commenting on Nutmeg’s announcement, Victor Basta, managing director of Magister Advisors, who advised Nutmeg, said Nutmeg’s deal represents the largest fintech fundraise to be announced in Europe since Brexit and the largest investment yet in a European robo adviser.  

He added it was indicative of the broader trend towards Asian investors backing the best European tech assets.

“This fundraise is a great vote of confidence in Nutmeg and in UK tech.  Nutmeg is without question the largest and most mature business in its sector in Europe. Clearly the investors see a significant opportunity for Nutmeg to become a world class global business.”

 “Digital wealth managers are bringing sophisticated wealth management to the masses.  Industry estimates indicate that the EU robo advisory market is likely to grow to $114bn, much faster than the more mature US market.

 “At a time when there are concerns about the impact of Brexit, here is a London-based business engaged in dynamic FinTech innovation and attracting global investors.”

Mr Basta said European tech is witnessing a surge in investment from Asia. He expected the value of investment this year to be ten times the level it was three years ago.

"We expect to see further significant rises in the years ahead.  We’ve already seen two blockbuster acquisitions of European tech companies, Supercell and ARM, by Asian buyers this year.”