Investments  

James Hay parent sold to private equity house

James Hay parent sold to private equity house

The parent company of pension provider James Hay has been sold to private equity house Epiris for £206m.

The deal to buy IFG Group includes the Saunderson House financial advice business as well as James Hay.

The acquisition price is a 46 per cent premium to the £1.32p closing share price of the company on Friday. The shares are 41 per cent higher this morning at £1.88, bringing them closer to the offer price.

Kathryn Purves, IFG's chief executive, said the deal was positive "both for shareholders and clients".

The announcement of the sale of the business came as IFG released its annual results, which showed the company made a profit before exceptional items of £12.4m for the year to the end of December 2018, representing a 12 per cent rise on the previous year.

One-off charges were £9.9m, compared with £8.8m for the previous year.

This comprised £4.9m to deal with its legacy issues with HM Revenue & Customs. Ms Purves said this figure had been arrived at through a "file by file" review and was a sign the company's legacy matters were closer to being resolved.

IFG's issues with HMRC stem from Elysian Fuels, which was sold as a scheme investing in renewable energy projects in the UK and the US, including in 2013 the launch of a bioethanol plant in Grimsby.

Meanwhile IFG’s unsuccessful attempt to sell the Saunderson House financial advice business cost it £3m in one-off charges in 2018.

Ms Purves said about 60 per cent of the clients of Saunderson House came through its discretionary managed service, launched in 2015 as a way to gain a younger client base in the accumulation stage of investing.

Ms Purves acknowledged the "greater transparency" on fees charged by financial advice firms, but said she believes "greater efficiency" will allow Saunderson House to maintain its profit margins.

david.thorpe@ft.com