Investments  

Transact’s Taylor rejected fund house offers for platform

Transact’s Taylor rejected fund house offers for platform

Ian Taylor, co-founder and chief executive of the Transact platform, said he rejected several offers for the business from fund houses before floating the company on the stock exchange.

Transact’s parent company, Integrafin, listed on the London Stock Exchange in March 2018. 

Mr Taylor said before listing there were a number of offers from fund houses to buy the business from him, all of which were rejected. Such tie ups, which link the investment management function and the platform, have become prevalent in the industry in recent years, with Standard Life and Quilter being examples of firms that combine both.

He said: “The fund management firms came to us, looking to buy us, and my first question was ‘why’, and they said, ‘it will help with the distribution of our products’ and I said ‘no it won’t, because we aren’t involved in distribution’. So such deals have never made much sense to me from the point of view of Transact.” 

He said: “At the time of the [initial public offering] a lot of the analysts were asking me what the exciting growth strategy is for the company. I said, basically, there isn’t one, I told them wealth management is a structural growth story. What we have to do is simply 'NFU': not foul up.

"Maybe other firms will have a scale advantage by doing what they are doing, by being vertically integrated, but I think there is an advantage for us as well, in being as we are. I think when something goes wrong, people want to talk to people, and with us they can.

"I don’t think the fact that consolidation has happened in the industry has hurt us, I can’t think of a significant client we have lost to a consolidator."

He added that Transact will not itself seek to launch an investment management business, or become an adviser. He said: “I think investment management is a valuable service, but so is being a platform, and I don’t see why they have to be combined. Certainly we have no desire to do that.”

Integrafin reported a profit of £22.2m for the six months to the end of March 2019.

The company had 173,000 clients during that period. 

Mr Taylor had previously told FTAdviser that he is aware the pricing structure of his business is not competitive for clients with smaller pots of assets, but that such clients are not of particular interest to him.

david.thorpe@ft.con