AssetCo has cut a deal with Preservation Capital Partners to acquire a 30% equity interest in Parmenion Capital Partners for up to £27.8m.
It has been targeted by the firm because it believes there are "significant opportunities to develop the business of Parmenion further, both organically and inorganically", including deepening its relationship with existing customers and growing its customer base, through ongoing technological innovation and by broadening its discretionary fund management and platform offerings to meet customer demand.
Parmenion is an FCA registered B2B fund investment and advisory platform for the wealth and IFA sector, servicing around 1,100 adviser firms and 2,600 financial advisers. It was announced in March that SLA had reached an agreement to sell it to private equity house Preservation Capital Partners for £102m.
We were compelled by Parmenion's market positioning, strong growth potential and excellent management team."
Peter McKellar, deputy chair and CEO of AssetCo, said: "Parmenion is a market leading investment and advisory platform. The business has a great opportunity to build on its strong IT and client focused foundations, given the digital transformation we are seeing within the asset and wealth management industry.
"The company has the people and expertise to grow and to continue to deliver for advisers and customers, as they seek to achieve their long-term investment objectives.
Following completion of the deal, Gordon Neilly, an adviser to AssetCo and former global head of strategy and corporate development at Standard Life Aberdeen will join the board of Parmenion.
The price of up to £27.8m will be paid in cash, with a payment of £20.6m due on completion and up to £3.6m due in each of March 2022 and March 2023. The deal is subject to regulatory approval and is expected be completed by the end of September 2021.
AssetCo has been on the hunt for more acquisitions to bolster its asset and wealth management strategy after collecting more than £30m from the conclusionof the Grant Thornton litigation.
"Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers," McKeller continued.
"It is intended that this will be achieved through the acquisition, primarily, of majority stakes in selected businesses which play into these structural shifts and supported by strong distribution to drive organic growth. Few businesses will divert us from this approach, but we were compelled by Parmenion's market positioning, strong growth potential and excellent management team."
First published by our sister title Investment Week