The chief executive officer at Nucleus Financial Platforms has said it would be a “wasted opportunity” if the firm did not look at more acquisitions over the next few years.
Richard Rowney told FTAdviser: “I get asked [if we are planning more acquisitions] all the time because we are the logical consolidator in the platform market."
He said the company does not need to do any more mergers or acquisitions to make its strategy successful, as the combination of Nucleus, James Hay and Curtis Banks is enough.
“But that would feel like it was a bit of a wasted opportunity, we have a very experienced team, we have a proven track record of delivering and we have a business model that enables us to bring those businesses together,” he said.
There are some logical synergies of bringing James Hay and Curtis Banks togetherRichard Rowney, NucleusRowney added that his key criteria in planning another acquisition is “doing it in a way that feels safe.”
“Would I hope to do another acquisition in 2024, yes, but only if it makes sense and if I feel we have got the capacity,” he said.
Rowney said sometimes businesses can be limited by the number of opportunities in the market.
“That is really not the case [currently],” he said.
A number of the platform’s competitors will not have anywhere near the level of investment and profitability of Nucleus, he said, and yet will be facing challenges from rising inflation and the need to invest in technology.
“Those businesses are going to be challenged,” he said.
Rowney said he has had approaches from companies asking to consolidate with Nucleus.
“At the moment our challenge is more limiting ourselves to our clear agenda.
“In 2024 my ambition will be to go and see if we can do something similar [to the Curtis Banks acquisition] but only if it makes sense,” he said.
The platform group posted an 80 per cent rise in revenue in 2022, hitting £114.5mn.
In its full year results, released today (May 17), the company said pre-tax profit was £25.4mn, up from a £24mn loss a year before.
The merger between James Hay and Nucleus drove administrative expenses up from £66.7mn to £81mn.
Net flows for products on sale were £169mn, however due to a number of products being closed, overall the group saw net outflows of £174.2mn.
Curtis Banks takeover
The group announced its £242mn acquisition of Sipp provider Curtis Banks in January this year.
Rowney said the company acquired Curtis Banks due to its similarities to James Hay.
“There are some logical synergies of bringing them together,” he said, adding that the company plans to replicate the work done on the technology of James Hay to Curtis Banks.
“That will turbocharge the Curtis Banks business,” he said.
As for the other reasons for acquiring the Sipp provider, Rowney said the strength of Curtis Banks’ Sipp business appealed to Nucleus.
“A number of advisers want that waterfront of products that they can go to, all underpinned by a common technology,” he said.
sally.hickey@ft.com
