Beech Tree Private Equity has agreed a deal with UK advice firm Advanta Solutions to provide funding for the business to pursue “a multiple acquisition strategy”.
This comes a few weeks after International Adviser reported that Beech Tree PE would “soon announce an investment in the wealth management sector”.
London- and Glasgow-based Advanta Solutions includes financial planning firm Advanta Wealth and a mortgage and protection business.
Simon Hemley and Andy Marsh from Beech Tree PE have joined the board of the Advanta Group as non-executive directors as part of the transaction.
The financial terms of the investment were not disclosed, but Beech Tree PE states that it “invests between £10m ($13.7m, €11.1m) and £40m in any one business”.
‘Firepower’
Craig Webster, chief executive of Advanta, said: “We have built a highly successful business model that involves a corporate sales structure and is different from the rest of the industry.
“This ensures that we provide a very high quality of service to our customers and that we can continue to invest in the core business, maintaining and indeed improving, service levels as we grow.
“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 or approaching 60. 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 assets under managment of more than £50m and Ebitda of more than £250,000. We have ample firepower to transact multiple acquisitions every year.”
‘Ambitious acquisition strategy’
Hemley, director at Beech Tree PE, added: “Finding an investment in this sector was one of the key objectives for our investment strategy in financial services. 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.
“We are very excited to be supporting Craig Webster and his management team and are delighted to invest in Advanta.”
Cessation
In a Companies House filing on 31 December, Advanta published a document which says that chief executive Webster will cease to be “a person with significant control”.
IA has contacted Advanta about what this means for Webster at the firm. The firm did not comment in time for publication.
