Fairstone has now welcomed a total of 29 new partnership firms across the UK and Ireland, over the last 24 months. This has brought an additional £4.1bn AUM and 177 advisers into the Group. In addition, a further 11 businesses were fully acquired over the same period.
In a statement on 14 January, it said the team ended 2024 with the signing of its 87th partner firm through its market leading Downstream Buy Out (DBO) programme, cementing its position as the most proven acquirer in the wealth management sector.
Fairstone said the DBO programme provides ambitious IFA firms who have no desire to sell in the immediate future, the ability to release capital on day one of partnership and then work towards a full sale at a future date of their choosing. Fairstone provides access to investment, resource, and new clients during the partnership period to ensure that each business reaches its optimal value at the date of full acquisition.
Speaking on the firm’s growth in 2024, and the success of the DBO model, Lee Hartley (pictured), CEO of Fairstone said: “Throughout 2024 we have welcomed some fantastic, growth-orientated firms into Fairstone through the DBO programme. Our mission is to become the most trusted wealth advisory firm in the UK and Ireland, with that in mind, the mutual alignment of company values has been fundamental to each acquisition, and to the success of the DBO programme to date.”
He added: “Over the last decade, every firm that has joined Fairstone through the Downstream Buy Out model has received no less than 100% of their initial sale value, with many having achieved a great deal more. Over the last 2 years the average value received after earn-out has been 120%, with the most successful firm hitting an incredible 180%.”
Due to the success of the model, Fairstone’s M&A team have extended the reach of the programme even further. 2024 saw the launch of the firm’s new Special Purpose Vehicle (SPV) and Start-up Joint Venture (SJV) models.
The former proposition enables entrepreneurial principals who have already taken their businesses through to full acquisition with Fairstone, to start, build and ultimately sell a new business of scale with infrastructure and capital support. At the other end of the spectrum, the SJV proposition enables clusters of independent, self-employed or employed advisers to become business owners in partnership with Fairstone and work together to create a capital event of their own.
Hartley said: “There are so many fantastic, employed advisers out there whose hard work is creating capital value for others. They are rightly nervous about the risk associated with setting out on their own. We take away that risk, allow them to continue to do what they do best, and ultimately benefit from the significant capital value that they create”.
Fairstone’s deal-making pipeline remains strong, with firms managing over £6bn of AUM engaged in advanced discussions.
Speaking on the year ahead, Hartley added: “Our DBO programme will continue to develop as the market leading offering and be at the heart of our acquisitive activity. The success of our business to date, is largely attributable to how attractive the offering is to ambitious IFA and wealth advisory firm owners. I am really looking forward to seeing what we achieve in the year ahead.”
