Global private equity house TA Associates has made a “major investment” in UK-based financial planning firm Fairstone Group.
The backing will be used to extend the company’s growth plans and will see TA take a significant stake in the business.
TA Associates has bought private equity firm Synova’s majority stake in Fairstone. But, Synova is re-investing in the group alongside current founder Alcentra.
Synova gave up its majority stake in Fairstone to deliver 4.5 times returns and an internal rate of return (IRR) of 40% – this marks the first realisation from the Synova Fund III, which raised £250m ($350m, €289m) in 2016, when the firm first invested in Fairstone.
The financial planner’s business model and buy-out programme will experience no change following TA’s investment.
Enhancing customer proposition
Lee Hartley, chief executive of Fairstone Group, said: “From a client perspective, our proposition and status as an independent, whole-of-market business remains completely unchanged. We fully believe in the value of being chartered and our clients can be confident that this transaction only serves to enhance Fairstone’s ability to meet every single one of their financial planning and wealth management requirements.
“This is a multi-faceted deal and paves the way for us to march ahead with our build plan with the addition of a tremendously experienced global financial backer in TA. We believe they are the right people at the right time to help accelerate our strategy and we can start to put clear blue water between ourselves and some of our peers.
“The combined expertise and backing of TA, Synova and Alcentra means we have a deeper and wider foundation than ever before. We’ll use this foundation as a platform to do more deals with an emphasis on ambitious firms that are on a clear upward trajectory. We’re not looking to simply consolidate steady-state businesses – we want to invest in growth.”
With the latest backing, Fairstone is not only looking at additional acquisitions, however.
Hartley revealed the firm plans to offer its buy-out programmes to appointed representatives within networks as well as deploy capital into the DFM space.
