The firms announced the deal today (May 27), which is still awaiting regulatory approval.
The acquisition will bring 1,500 adviser customers and 90,000 of their clients to M&G.
Ascentric’s top boss Rob Regan had confirmed it was in preliminary discussions with a then-unknown buyer back in February as he reassured advisers it was “business as usual” for the platform.
Barry O’Dwyer, chief executive of Royal London Group, later told FTAdviser the coronavirus crisis had not affected the company’s plans to sell Ascentric.
This is the first time M&G has entered the platform space, and the acquisition gives the fund house the capability to offer third-party discretionary fund management services, as well as individual savings account, self-invested personal pension and general investment account wrappers on a single platform.
The sale also follows the completion of Ascentric’s replatforming in 2019 and the conclusion of a comprehensive strategic review led by Mr O’Dwyer.
Mike Barrett, consulting director at the Lang Cat, said: “On the face of it, this appears to be good news for all involved. It gives some certainty for the employees of Ascentric, and also the advisers who currently use their services.
“For M&G, it gives them a fully functioning platform, fresh from a recent replatforming, which if they choose to combine with the distribution footprint that PruFund gives them, could be a very compelling proposition.”
Ben Hammond, platforms director at Altus consulting, agreed, adding it was a "good move" for M&G who was looking to grow further into the platform space.
He added there were "definite synergies" across the firms in terms of Bravura’s Sonata software, which would lead to efficiencies for the platforms overall.
John Foley, chief executive of M&G, said the deal strengthened its position in the UK savings and investment market as it “complemented” its existing offering to advisers and customers with a “well-established digital wealth management platform”.
He added: “Asentric’s platform will also accelerate our ability to provide a wider range of M&G and Prudential investment solutions to more customers, through the tax wrappers and service propositions they favour. Advisers will also benefit as we invest to grow the platform.”
The pace of merger and acquisitions activity in the platforms market has been on the up over the past few years.
Last November Embark’s expansion in the platform space continued with the company’s acquisition of the Zurich platform, just months after it bought the advised business of Alliance Trust Savings from Interactive Investor.
Private equity firms have also reared their heads into the platform world. Epiris bought the James Hay platform last year while Wealthtime was snapped up by AnaCap Financial Partners just this week.
But some market participants have warned M&A deals rarely work out. Technology migration issues have hit the headlines over the past few years, while others suggested the people and culture at firms could make or break the transitions.
imogen.tew@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.
