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Nucleus CEO: Adviser concerns based on ‘ignorance’ of PE money

Nucleus CEO: Adviser concerns based on ‘ignorance’ of PE money

Nucleus’s chief executive Richard Rowney has said the fears advisers have around the private equity ownership of the platform are based on “a bit of ignorance”, adding that "all businesses are owned by someone".

Yesterday (March 29), private equity firm HPS Investment Partners announced its acquisition of a majority stake in Nucleus, making Epiris - its previous private equity owner - a minority shareholder.

Advisers have since shared their concerns, which include the possibility of price hikes or operational changes as the new owner tries to turn a bigger profit before they sell it on again.

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They also cited the danger of Nucleus becoming "too big" causing service levels to drop, and of HPS ultimately selling it to a product provider.

FTAdviser put some of these concerns to Rowney today (March 30). Acknowledging advisers’ fears more broadly, Rowney said: “I’d put money on it that I speak to more clients and advisers than my peers in the large groups to understand their concerns and allay their fears.

“And a lot of this is, dare I say, a bit of ignorance. A bit of what they read in the press about PE ownership.” Rowney cited James Hay’s progress since Epiris bought it in 2019 to know PE ownership was not to be feared.

“Epiris originally bought the James Hay business three years ago because it did need sorting. It did need a new management team. It did need a restructure. It did need to make a decision on its technology,” the Nucleus boss explained.

“All of those have been done under my leadership,” he said, before quickly admitting; “We’ve still got some way to go on the service.”

Nucleus has a history of adviser ownership, having been formed in 2006 by a group of seven adviser firms but it floated on the London Stock Exchange in 2019.

Before it was sold to a private equity firm, one of Nucleus's owners was South African firm Sanlam which decided to sell as part to scale back its UK arm.

The James Hay platform is gearing for its move to FNZ technology at the back end of this year. Nucleus currently has a contract with Bravura until 2025 so the priority is to get James Hay’s clients onto the new platform first. 

Since Nucleus became part of the enlarged group, around £5mn has been invested into its service and £6mn committed to platform development for this year.

Rowney said in the past year working with Epiris, the private equity firm "dug deep" whenever he had asked for investment.

'All business are owned by somebody'

David Batchelor, a managing director of Wills and Trusts Wealth and founding board member of the Personal Financial Society, uses Nucleus for some of his firm’s legacy business.