Mergers and acquisitions  

Wealth manager secures millions in PE backing to pursue deals

Wealth manager secures millions in PE backing to pursue deals

A London and Glasgow-based adviser has secured millions in private equity backing to pursue an acquisition strategy it hopes will include multiple deals a year.  

Advanta Solutions, which includes financial planning firm Advanta Wealth and a mortgage and protection business, has struck a deal with Beech Tree Private Equity worth between £10m - £40m. 

Last month FTAdviser first reported Beech Tree was nearing the completion of a deal in the wealth management sector, an industry which it had been eyeing for "some time". 

Advanta Solutions employs around 60 staff and manages almost £500m in assets, a figure which has grown from £200m three years ago. 

The business is set to use the funding to pursue both organic growth and an acquisition pipeline which Craig Webster, chief executive of Advanta, said would include "multiple acquisitions every year". 

Mr Webster said: "We intend to accelerate organic growth by recruiting several additional advisers each year who share both our focus on customer service and our growth ambitions.

"On the acquisition side, we believe there are around 3,000 financial advisory firms out there with principal owners either already 60 years old or approaching that age.

"We understand that retiring owners are focussed on ensuring a legacy and that their businesses can continue to prosper with both staff and customers looked after appropriately going forward.

"We are fully committed to doing just that and will target acquisitions with AUM of more than £50m and EBITDA of more than £250,000."

Private equity investment has become a prominent theme in the wealth management landscape in recent years. 

Beech Tree provides funding to support management buy-outs, acquisitions or organic growth in the financial services industry, alongside the support services sector and technology market.

Simon Hemley, director at Beech Tree, said finding an investment in the wealth management sector had been a key objective for the private equity firm's strategy in financial services.

Mr Hemley said: "It is a growing market, but we wanted to find the right business that was growing at a faster rate than the market as well as providing the platform for an ambitious acquisition strategy.

"It was clear immediately that we shared the same vision as Craig Webster and his team – a two pronged growth strategy of sustainable organic growth with best in class customer service combined with acquisitions."

The deal will see Mr Hemley and Andy Marsh from Beech Tree Private Equity sit on the board of the wider Advanta group as non-executive directors.