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Fairstone secures funding for acquisitions

Fairstone secures funding for acquisitions

Fairstone has secured another £30m from its financial backers to continue buying advice businesses.

The consolidator has secured the funding from its lead investor, the private equity firm Synova Capital, which originally invested in Fairstone in 2016.

The new funding is a joint facility from HSBC and Lloyds which will support Fairstone’s acquisition programme.

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Lee Hartley, chief executive of Fairstone, said: "Having the support of Lloyds and HSBC increases our financial flexibility going forward and as the group continues to grow our available facilities will grow alongside.

"The initial commitment into the acquisition facility alone takes the total funding we have raised for business development purposes to £70m from inception."

During 2018 Fairstone bought eight financial advice businesses, taking its funds under advice to £8.1bn and bringing its total number of advisers to 320.

Over the past year, Fairstone's client base grew by 25 per cent to 51,000.

The company operates a downstream buyout process, which sees Fairstone take a stake in an advice firm before integrating it and completing the acquisition.

Fairstone has also announced it has fully acquired another two firms: Darlington-based Belasis IFA and Allensons in Wokingham, bringing in a combined £50m in funds under management and 20 staff.

Three more companies have entered its downstream buyout process, but have not yet been bought out: Dundee-based Findlay & Company Financial Services, Norfolk-based Hamlyn Financial Services and Essex-based Andrew Cohen Associates.

Mr Hartley said: "The needs of our clients always come first and to that end we implemented an extensive feedback programme on Trustpilot, which shows an overall client satisfaction rating of 97 per cent, which is testament to our commitment that our client relationships should underpin all aspects of our business.

"Fairstone has also seen impressive growth through all of our business streams. Revenue [...] performance has been substantially ahead of the prior year in each channel and importantly this is being delivered without any cross-subsidisation between our financial planning and investment management businesses.

"Our DBO programme is yielding exceptional results with a significant number of business being onboarded and coming through to full acquisition.

"These firms are showing consistent growth performance as they take advantage of the regulatory, technical and operational support that Fairstone provides."

damian.fantato@ft.com