Bestinvest, the UK wealth manager and online investment service, is to be acquired by a company owned by the Permira funds for an undisclosed sum.
The transaction, which is subject to regulatory approval, is expected to complete in the first quarter of 2014.
Founded in 1986, Bestinvest is a UK private client investment group that provides a broad range of services for private investors whether they choose to make their own decisions or require investment advice, financial planning and investment management.
The UK wealth management industry offers attractive growth dynamics with assets increasing in excess of 10 per cent annually in recent years. Despite recent consolidation it still remains very fragmented with a long tail of subscale firms with under GBP3bn of client assets. The Permira funds will back Bestinvest’s plans to capitalise on the “advice gap” resulting from the Retail Distribution Review and will also help Bestinvest participate in the ongoing industry consolidation.
Peter Hall (pictured), chief executive of Bestinvest, says: “The success of our business has been firmly built on our impartiality and expertise in research and offering the highest standards of professionalism and client service at great value-for-money. In looking for a partner to support the future growth of the business, the Permira funds stood out from the crowd in their understanding and appreciation of our distinctive ethos and their commitment to invest in the management team’s growth strategy.
“The introduction this year of the Retail Distribution Review, which has replaced commission-based advice in the UK with transparent fees, has presented Bestinvest with an excellent opportunity for both organic growth and potential acquisitions.”
Ian Lobley, partner at 3i, says: “During 3i’s investment, Bestinvest has been transformed as a business and continued to grow, despite some challenging times in the financial markets. Today Bestinvest has around GBP5bn of funds under management and a strong reputation in the industry. As Bestinvest enters a new phase of development we thought now was the time for us to realise the value created with the management team and introduce a new partner to support the company’s future growth.”
Philip Muelder, partner at Permira, says: “Bestinvest is a fast-growing and award-winning company in the attractive UK wealth management market, providing a range of services to support clients across their whole lifetime whether they need advice, portfolio management or choose to make their own decisions. The business is in a strong position to play a key role in further industry consolidation and we look forward to backing Peter Hall, Mike Covell and their team in this exciting next phase of growth.”
Bestinvest and 3i were advised by Evercore and Macfarlanes. Permira was advised by Fenchurch Advisory Partners and Freshfields Bruckhaus Deringer. Bestinvest’s management were advised by Jamieson Corporate Finance and DLA Piper.
