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Embark to curb acquisitions after £84.5m fundraise last year

Embark to curb acquisitions after £84.5m fundraise last year

Embark Group raised a hefty £84.5m to support its acquisition trail in the UK platform space last year but is set to focus on organic growth going forward.

The firm’s results for the year to December, released today (May 18), showed it had conducted two growth capital raises in 2019 raising a gross £84.5m for its three acquisitions — the adviser platform business of Alliance Trust Savings, the Zurich platform and Zurich’s investment services arm.

The firm stated the three deals had resulted in a “greater balance” between Embark’s bespoke pension and wrap platform scale and had “significantly extended” its distribution reach.

But Phil Smith, chief executive at Embark Group, told FTAdviser the firm was not interested in making further acquisitions in the near future.

He said: "We have got more than enough organic stuff to be focused on so acquisitions are not a great driver for us.

"We do not have a gap to fill so we're not really in need — we have no plans for any buys in 2020."

Embark had announced its acquisition of the Zurich platform last November, after reports in the summer that Zurich was eager to sell the business.

This followed an agreement for Embark to buy the adviser platform business of Alliance Trust Savings from Interactive Investor, a move that brought £6bn of assets and about 30,000 clients to the Embark platform.

While clients on the ATS platform were transferred to the original Embark platform, Zurich’s platform remains a standalone offering.

Today's results also showed Embark Group saw a 15 per cent increase in client numbers throughout last year, clocking 20,000 new customers in the 12 months.

Customer numbers totalled 160,000 by the end of 2019, up 15 per cent from the previous year which was primarily driven by new self-invested personal pensions business.

Although Sipp customer numbers were up, the group's latest accounts showed Embark had seen its income from high-risk investments and complex pension products replaced by increasing numbers of digital Sipp clients.

Embark also today reported a 10 per cent increase in assets under administration to £16.2bn and a 5 per cent jump in revenue to £33.5m.

Embark said its balance sheet had improved in the time period, marking an 126 per cent increase in net assets including an 88 per cent increase in net cash levels.

David Etherington, non-executive chairman at Embark Group, said: “We are very pleased to have continued our accelerated momentum of the previous few years. 

“The ability to grow simultaneously through organic and inorganic activity marks our business out amongst its peers.”

imogen.tew@ft.com

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