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Lighthouse buys a stake in Tavistock

Lighthouse buys a stake in Tavistock

Tavistock Investments and Lighthouse have entered into a "strategic agreement" which sees the latter take a 5.3 per cent stake in the former.

Lighthouse has paid £1m for its stake in Tavistock and the two companies have agreed to establish an investment management service together.

This business will develop and distribute investment products and services under Lighthouse's Luceo brand to that company's clients through its advisers.

These products include Tavistock’s recently launched capital protection products and may include others available through Tavistock, such as its model portfolio service.

Malcolm Streatfield, chief executive of Lighthouse, said: "Tavistock has demonstrated its ability to establish an investment management business of scale and I am delighted that we will be working together to develop additional high quality investment solutions for the benefit of our mutual client bases.

"I believe that this will be the start of a successful working relationship between Lighthouse and Tavistock."

The £1m investment has been raised by issuing shares, with a total of £1.25m raised from a number of investors.

This money will be used to replace an existing £2m debt facility with a new £2m five-year facility from NatWest Bank at a lower rate of interest which Tavistock estimated will save some £100,000 a year in interest.

Brian Raven, Tavistock's chief executive, said: "[Lighthouse's] selection of Tavistock as its partner to further develop its Luceo range of investment solutions is a strong endorsement of our expertise in this field.

"We look forward to achieving considerable success together in the coming years."

Lighthouse currently has £5bn of assets under advice and provides its services to a range of employee organisations through its affinity contracts. It launched the Luceo Asset Management range in 2016.

Last week Tavistock reported assets under management of £941m through its own fund range, an increase of 26 per cent over the past year.

damian.fantato@ft.com