Interest in Ascentric ‘exceeded all expectations’

Interest in Ascentric ‘exceeded all expectations’

The level of interest in Ascentric from potential buyers “exceeded all expectations” when it was flagged the platform was up for sale earlier this year, according its top boss.

In a note to financial advisers, sent today (May 27) and seen by FTAdviser, chief executive Rob Regan said despite the “volatile markets and widespread business disruption” caused by the coronavirus crisis, there had been “significant interest in Ascentric”.

He added: “In fact, the response has exceeded all my expectations.”

Royal London and M&G announced this morning the two firms had reached an agreement for M&G to acquire the Ascentric platform business from Royal London, subject to regulatory approval.

The acquisition will bring £14bn of assets under administration, 1,500 advisers and 90,000 clients to M&G.

It will also give M&G the capability to offer third-party discretionary fund management services, individual savings account, self-invested personal pension and general investment account wrappers on a single platform.

The news has gone down well, with platform experts Mike Barrett, consulting director at the Lang Cat, and Ben Hammond, platforms director at Altus consulting, agreeing the buyout was “good news” for all involved. M&G's share price has jumped 8.6 per cent since.

In the note, Mr Regan told advisers his priority throughout the process had been to “secure the right investment” in the business so it could continue to “develop and grow” in a way that supported adviser businesses, adding: “I believe we have achieved an excellent outcome.”

He said it was "great news" no one would be required to replatform and pointed to M&G’s “financially strong” position and the fact the fund house expected to invest further in the infrastructure and digital capabilities of Ascentric.

Replatforming woes have blighted the platform industry over the last few years, with botched attempts wreaking havoc among adviser clients.

Mr Regan added:“[M&G] views the acquisition of Ascentric as strengthening their position in the UK savings and investment market, complementing their existing offering to advisers and clients.”

“We will now go through the usual regulatory process to get the deal approved. Until then, it will be business as usual. You will not see any major changes in our operations, and we will continue to develop the platform and our service in line with our current plans.”

It was first announced Ascentric was up for sale in February of this year, while Royal London confirmed the coronavirus crisis had not put the brakes on any potential deals a month later.

M&G is the latest firm to delve into the world of platform mergers and acquisitions, and the pace of platform buyouts has been on the up over the past few years.

Embark Group has expanded its role in the platform space over the past year, buying both the Zurich platform and the advised business of Alliance Trust Savings.

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.