Fairstone Group has secured a major investment from Synova Capital, a Private Equity investor that focuses on UK growth companies.
Synova has become the lead investor in Fairstone by providing an initial capital injection of GBP25 million as part of the deal with further cash available to Fairstone in the future.
To date, Synova’s funds represent in excess of GBP400million and this is the first transaction to be completed out of their third fund. This latest deal sees Synova continuing its strategy of investing in forward-thinking companies operating in attractive market sectors with clear prospects for earnings growth and value creation.
The transaction also sees a realisation by several early stage shareholders in Fairstone all of whom have received substantial returns on their primary investments. In parallel, Committed Capital, Northstar Ventures and two family offices have retained equity positions, meaning that Fairstone will continue to benefit from a suite of financial backers with significant depth and breadth of reserves.
Commenting, Lee Hartley, Chief Executive of Fairstone, says: "Synova’s investment signifies an exciting gear change in Fairstone’s build plan and demonstrates our appetite to complete more and larger buy-out deals over the short to medium term. We are committed to working with high quality firms, with meaningful levels of assets under management, who want to drive their performance upwards and realise optimum value for their business.
“Our entire management team is obviously delighted to be working with Synova and this project has taken several months of careful planning. Synova has a proven track-record in investing into highly scaleable and technology leveraged businesses like Fairstone. This partnership with a leading mid-market PE house will allow us to accelerate our successful Downstream Buy Out (DBO) acquisition model beyond our current forecasts.”
Alex Bowden, Partner at Synova and newly appointed Director of Fairstone, adds: “Widespread change across the financial services sector has paved the way for new and innovative business models like Fairstone to develop. Against the backdrop of ongoing professionalization and technological advances, exciting opportunities exist for quality operators to evolve into real market leaders.
“Fairstone already has a strong standing within the sector and now has one of the largest Chartered financial planning firms in the UK within the group. We are delighted to be partnering with Fairstone as the business builds upon its highly successful acquisition programme."
Founded in Newcastle in 2008 Fairstone has grown to encompass 260 financial advisers throughout the UK servicing 25,000 private clients with GBP5.8 billion of assets. The company has current run-rate revenues in excess of GBP32m and aims to complete a sizeable number of acquisitions over the next five years.
David Hickey, Chairman of Fairstone , says: “The combination of Fairstone and Synova is an exceptional fit on a number of fronts. From the outset it was apparent that Synova had been tracking the business for some time, understood the sector, and already had a high degree of knowledge of the Fairstone business model and its existing growth trajectory.
This transaction introduces very substantial expansion capital into Fairstone and the Board foresee a sizeable shift in the scale of the group’s activities.”
