IFA merger & acquisitions spend jumps 111%

Stuart Dyer, chairman at introducer Soprano Mergers and Acquisitions, said the increasing figures were "very much in line" with his company's own experience of market conditions, in a trend he expects to accelerate.

Mr Dyer said: "The main drivers have not really changed, except perhaps that the prolonged bull market means the value of IFA businesses has grown commensurately. Professional indemnity insurance has also become a more prevalent issue."

He added: "The other factor is greater demand—we are seeing private equity-backed businesses pursuing aggressive roll-up strategies, from new entrants as well as the established players, and the characteristics of the IFA market are attractive to private equity.  

"There seems to be a balance between supply and demand and it is difficult to determine which way this will move in the medium term. However, we are sensing a slight hardening in pricing." 

Fred Hansson, partner at IMAS Corporate Finance, agreed the market had attractive characteristics for private equity investors, attracting capital which expected a certain return. 

He said: "The big firms are getting bigger and acquiring smaller entities, so there is a lot of deal activity across various sizes and categories of IFA businesses, possibly because there are more buyers now. I think that has made vendors aware this is probably a good time to sell." 


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