Advice firm Frenkel Topping has refocused its acquisition strategy away from independent financial adviser firms after it failed to find “suitable” targets despite an “extensive” search.
In its half yearly results, published today (September 22), chief executive Richard Fraser said the firm had re-evaluated its position and strategy to focus on consolidating the market for personal injury and clinical negligence advice instead of IFAs.
He said: “Over the past two years, we have extensively sought to acquire other IFAs which would be accretive to the group.
“During this period, we have carefully assessed a number of targets and...none were deemed suitable.”
Mr Fraser added that a focus on personal injury and clinical negligence was a “more effective” and “less risky” method of increasing the group’s assets and would yield higher levels of organic growth than a traditional IFA firm.
Earlier this year, the firm partnered with a law firm specialising in personal injuries to offer investment products to the personal injury market.
In July, Frenkel Topping acquired Forth Associates, a forensic accountancy firm based in Manchester and Leeds, and raised £13m for further acquisitions in the personal injury and clinical negligence markets.
Mr Fraser described the opportunity in the sectors as “significant”, saying they represented a combined £3.4bn of assets under management mandates per year.
He added: “We believe that our refocused buy and build strategy together with efforts to grow our core business and deliver high-quality services to our clients, will build a substantial business with considerable scale.
“This, in turn, will help generate strong and sustainable returns for our shareholders.”
His comments come as the group posted revenues of £4.4m for the six months to June, 9 per cent up from last year’s £4.1m, while its gross profit was up 10 per cent to £2.5m.
Its assets under management jumped 13 per cent, from £851m in 2019 to £962m as at June 30, 2020.
The group also posted £75m of new investment mandates, 70 per cent more than in the comparable period last year, while new business income of £0.95m was up 5 per cent on 2019.
Mr Fraser said: “The first six months of 2020 have been unprecedented as the world confronts the ongoing Covid-19 pandemic and I am grateful to the Frenkel Topping team and stakeholders for their support during these challenging times.
“The second half of the year has begun positively and trading remains strong and in line with management's expectations.
“The board is confident of our future and that we have the right culture, resources and expertise to continue to grow our business organically, execute our roll-up strategy and become the market leader in providing a full service offering to clients and claimants in personal injury and clinical negligence."
imogen.tew@ft.com
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