InvestmentsSep 24 2021

Kingswood lines up 9 M&A deals in UK growth push

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Kingswood lines up 9 M&A deals in UK growth push

Kingswood is turning its consolidation efforts to the UK after posting a 646 per cent jump in revenue to £61.5m in the first half of this year, which it credits to acquisitions and growth in the US.

Having acquired Admiral Wealth Management in the UK last month, Kingswood said in its interim results today (September 24) it had “an extensive pipeline of potential UK M&A opportunities under evaluation with nine transactions currently under exclusive due diligence including opportunities in key preferred markets across the UK”.

The wealth and investment management group is also in “exclusive” discussions with three businesses outside the UK, two of which are wealth management businesses.

Its plan is to continue delivering “significant inorganic growth” across both the UK and stateside business.

Kingswood UK, which includes its wealth management and investment management divisions, posted an operating profit of £2.8m between January and June 2021, up on £1m in the same period last year.

It also posted a £10.6m revenue, with its wealth management division almost doubling revenue from £4.7m to £8.3m.

Kingswood’s US arm, which began operating last year, posted an operating profit of £2.5m. Its revenue reached £51m, £41.8m of which were investment banking fees and £9.1m of which were wealth management revenues.

But overall, the firm posted a loss before tax for the period to June 30, 2021 of £3.7m, the bulk of which was made up of £4.8m acquisition expenses, business re-positioning and transaction costs.

Kingswood’s UK adviser count jumped to 64 this year, more than double the 30 it housed last year. Its assets under advice sit at £4.5bn, with some 8,000 active clients. In the US, Kingswood now houses 207 authorised representatives.

"We are now benefiting from our acquisition strategy and successful entry and consolidation of our position in the attractive high growth US market,” said Gary Wilder, Kingswood’s group chief executive.

“Kingswood remains focussed on building its long-term value strategy, centred around vertical complementary growth business lines in the international independent retail wealth and investment management sectors.  

“With the acquisition of Admiral Wealth Management in the UK in August and a strong pipeline of UK and international acquisition opportunities, the second half of 2021 promises to be another busy and exciting period for the group. 

“With the financial and strategic support of Pollen Street Capital and KPI, Kingswood will continue to capitalise on the consolidation, acquisition and integration opportunities across international wealth and investment management markets."

Whilst David Lawrence heads up UK operations, Mike Nessim heads up business in the US.

“Acquisition, integration, and growth are stated imperatives for us,” said Lawrence.

“We have built some great momentum in developing a pipeline of acquisitions which we hope to convert during the remainder of 2021 and into 2022. 

“The acquisition selection process is rigorous; targets must be singularly dedicated to servicing their clients with the Kingswood model designed to free up adviser time to focus more on clients.

“Similarly, we have become well-practised at integrating acquired businesses, with specialist teams leading this activity, that will then create a platform for future growth."

He added: “I am confident that a combination of investment and proactive management of our business will serve us well as we go forward. My ambition is to make Kingswood a magnet business for all, not least for firms wanting to take their next step in joining a progressive and capable wealth management business.”