Tilney Bestinvest, a portfolio company of private equity firm Permira, has agreed to acquire Towry from majority shareholder Palamon Capital Partners for £600 million. Palamon will net a 13x return on Towry’s exit, says the company.
The combination will create one of the leading UK wealth management firms offering clients award-winning investment management alongside highly skilled financial planning on a national scale.
The combined business will manage over £20 billion of assets for affluent and high net worth clients.
The combination will bring together two well established and highly successful firms. The enlarged Tilney Bestinvest group will continue to use the Towry, Tilney and Bestinvest brands in different parts of the market while a review of future branding is undertaken. Peter Hall, CEO of Tilney Bestinvest, will lead the combined group.
The combined business comprising over 240 financial planners and 120 investment managers will operate from a network of more than 30 offices across the UK providing full national coverage. The group will offer a comprehensive range of services including investment management, investment advice, financial planning and, in Bestinvest, a state-of-the-art online service for self-directed investors. The majority of the assets will be managed with over 80 per cent. in discretionary investment management services. Over 40 per cent. of assets will be managed for clients with over £1 million.
The increased scale of the combined business will enable it to service clients locally across the UK through its extensive network of offices, offer a broader range of services and continue to make major investments in people, technology, systems and infrastructure to support clients with excellent service and investment performance.
“This is a transformational deal that will position the combined group as one of the leading UK wealth management firms providing both financial planning and investment management services,” said Peter Hall, Chief Executive of Tilney Bestinvest.
“Towry and Tilney Bestinvest are an excellent fit with both firms having highly skilled teams that provide top quality financial planning and investment management services to clients,” said Rob Devey, Chief Executive of Towry. “Moving forwards the combined business will be able to offer an even wider range of services for clients and career opportunities for employees in all parts of the UK.”
“Since acquiring Bestinvest only two years ago with assets and revenues of £5 billion and £39 million, the Permira Funds have backed Peter Hall and his team to build one of the largest and fastest growing players in the UK wealth management market,” said Philip Muelder, Partner and co-head of the Financial Services team at Permira. “The business has achieved this through a series of highly synergistic acquisitions and strong organic growth, which will be further enhanced by its recently launched joint venture with Saga. With over £20 billion of assets and £200 million of revenues once Towry is acquired, the group will have the scale to continue to invest to enhance its range of services for clients and will be well positioned to take advantage of the increasing demand for advice which presents significant growth opportunities.”
“It has been a tremendous experience to have executed a transformational growth strategy that saw Towry develop from a single office IFA in Marlow with £5 million of revenue to become one of the nation’s leading national wealth managers with revenues of more than £120 million and over £9 billion of assets under management,” said Daan Knottenbelt, Partner at Palamon.
Towry was advised on the transaction by Evercore and Tilney Bestinvest was advised on the transaction by Citi. The transaction is subject to regulatory approval.
Tilney Bestinvest is a leading investment and financial planning firm, owned by staff and the Permira funds, that builds on a heritage of more than 150 years. The firm look after £11.4 billion of assets on its clients’ behalf.
On 5 February 2016, Tilney Bestinvest announced the acquisition of Ingenious Asset Management, a London-based discretionary investment manager with £1.8 billion under management. The transaction is expected to complete in April 2016, subject to regulatory approval.
Towry is an established financial planning and wealth management business, owned by staff and funds managed by Palamon Capital Partners employing approximately 900 people in a network of offices across the UK.
Palamon originally acquired John Scott & Partners, a small founder-led wealth manager with £250 million AuM in 2003, having identified the potential to build a national leader of scale in the highly fragmented financial advisory sector. John Scott & Partners was acquired by Palamon in an off-market transaction and selected because it had a distinctive model of charging clients on a fee-for-advice basis, combined with a discretionary asset management service, as opposed to the prevailing commission based sales model. Palamon led an ambitious buy-and-build strategy to roll out the John Scott model, which included the reverse take-over of Towry Law in 2006 and the acquisition of the UK subsidiary of Edward Jones in 2009, amongst others.
Towry went on to complete a further six acquisitions including the transformational take-private of Ashcourt Rowan plc in 2015, with £2.3 billion of discretionary assets under management.
Palamon uses a thematic investment strategy to identify and invest in service-sector businesses that are well-positioned to take advantage of long-term macro-economic trends. Typically the firm seeks to acquire founder-owned businesses that it can help to access new levels of growth, through institutionalization and strategic and financial support. In 2013, Palamon realized its investment in founder-owned Cambridge Education Group for a 14.6x investment return. The firm has continued to identify primary investment opportunities during 2015, acquiring control positions in three founder-owned businesses: Currencies Direct, one of the largest specialist international payments providers in the UK; Il Bisonte, an Italian leather accessories brand with an established sales presence in Japan; and The Rug Company, the leading global retailer of designer luxury rugs.
Permira is a global investment firm that finds and backs successful businesses with ambition. The firm advises funds with a total committed capital of approximately €25 billion (US$28 billion). The Permira funds make long-term investments in companies with the ambition of transforming their performance and driving sustainable growth. In the past 30 years, the Permira funds have made over 200 private equity investments in five key sectors: Consumer, Financial Services, Healthcare, Industrials and Technology. Current healthcare investments include Pantheon Healthcare Group. Permira employs over 200 people in 14 offices across North America, Europe, the Middle East and Asia. The firm was founded in 1985 and operated under the Schroder Ventures brand. After raising its first pan-European fund in 1997, the firm became Permira following a rebrand in 2001.