Kingswood bags another IFA as it guns for 10 new deals

This morning (May 12), the firm bought Vincent & Co Ltd, a Lincolnshire-based adviser firm, in a deal worth £421,000, with £211,000 to be paid upon deal completion and the remainder over a two-year period.

Vincent & Co brings with it 130 clients, £25mn of assets under management, and annual revenues and profits before tax of £135,000 and £83,000 respectively.

Kingswood's near-term target is to build its UK assets in excess of £10bn. In addition, it is aiming to manage £14bn globally. At present, it manages £9bn of assets and around 19,000 clients globally.

So far, the firm has acquired nine businesses in the UK, including Vincent & Co, since its UK chief executive, David Lawrence, joined the business in December 2020.

Currently, four potential acquisitions are sitting in the due diligence phase. Kingswood has drawn a further sleeve of money from Pollen Street Capital which Lawrence said was “more than enough” to fund the firm’s deal pipeline.

All of our pipeline opportunities are in the south as we rebalance what was a more dominant northern presence.Kingswood’s UK chief executive, David Lawrence

Back in September 2019, Kingswood received an £80mn commitment from the investment management firm. Some £77.4mn of the £80mn has been set aside for inorganic growth - some of which has been dipped into.

“We’d love to be in all parts of the UK,” Lawrence told FTAdviser. “All of our pipeline opportunities are in the south as we rebalance what was a more dominant northern presence.”

Typically, Kingswood has been buying businesses with two to four advisers in regional locations across the UK. More recent deals have been based in and around Essex in line with the firm’s southern expansion.

Our focus is very heavily now on internal and open market investment management, as well as financial advice.David Lawrence

Lawrence said “in the sea” of all these deals, the firm’s acquisition of IBOSS Asset Management last year was “key”. The firm provides around 50 IFAs with investment solutions nationally.

“It gives us a great investment solution for clients. It gives IBOSS a great opportunity to help firms with exit strategies and capital raising at an earlier time than perhaps the business may have been doing,” the UK CEO explained.

“That’s quite new. The deal completed in December, but it’s a point of differentiation for Kingswood over other consolidators, because our focus is very heavily now on internal and open market investment management, as well as financial advice.”

We aren’t looking for people who want to check out.David Lawrence

For all Kingswood’s acquisitions in the UK so far, Lawrence’s mantra has been to keep the front end of the business as “sacrosanct”, meanwhile centralising its compliance, finance and human resources departments in order to free up advisers’ time.

“We aren’t looking for people who want to check out, we’re looking for people who want to re-focus on a particular part of the business and grow it,” Lawrence explained. 

In September 2021, Kingswood announced it was turning its consolidation efforts to the UK after posting a 646 per cent jump in revenue to £61.5mn in the first half of that year which it credited to acquisitions and growth in the US.

The company holds around £9.1bn in assets under advice and management, with offices abroad in Johannesburg, Atlanta, New York and San Diego, as well as across the UK.

The firm’s latest UK acquisition, before Vincent & Co, was in February when it purchased Rotherham-based Allotts Financial Services in a significantly bigger deal worth up to £2.5mn.

Exploring digital routes

As well as growing inorganically, the consolidator is also looking at a number of different technology avenues in order to make onboarding and servicing more efficient.

“We’re not going to launch a fully digitised service,” said Lawrence. “We want more efficiency for advisers, so we’re looking at how we can host different types of digitally-enabled services to cater to different clients. It’s incumbent on us to introduce different routes, but it’s not a one-size-fits-all approach.”

Last month, Kingswood announced the appointment of Richard Avery-Wright to the boards of its UK subsidiaries, KW Wealth Planning Limited and KW Investment Management Limited.

Avery-Wright previously founded RCP Holdings Limited which has gone on to co-found or invest in a number of fintech startups, including Wealthify - the Aviva-owned online investment service which started working with IFAs back in September 2020.

His "knowledge and expertise in fintech" were cited as "invaluable" attributes he would bring to Kingswood, which is intent on building a "presence" in the the fintech space.

ruby.hinchliffe@ft.com