M and A
Another Private Equity House Buys Into UK Wealth Sector

A number of UK advisory businesses have attracted bids and deals from the private equity industry over recent years.
European investment firm Nordic House has agreed
to buy UK independent financial advisor group Ascot Lloyd, continuing
a trend of private equity houses buying wealth managers and
related businesses.
Nordic Capital is buying the business from funds managed by
Oaktree Capital Management, alongside the interests of Ares
Management Corporation.The financial terms of the deal, which is
subject to regulatory approval, were not disclosed.
Oaktree, which has invested in the business since 2013, acquired
Ascot Lloyd in 2017.
Ascot Lloyd, whose chief executive is Nigel Stockton, is
approaching £10 billion ($13 billion) in funds under influence.
The firm, which provides financial planning, wealth management
and corporate benefit solutions to in excess of 20,000 core
clients, has more than 500 staff across its 17 UK locations.
“Ascot Lloyd has grown to become one of the UK’s leading
independently-owned IFA firms. Since appointed to lead the
investment by the end of 2016, the company has tripled AuM and
more than quadrupled revenues, with over 80 acquisitions executed
to date. In Nordic Capital we are pleased to have found the right
partner and investor for the next stage of Ascot Lloyd’s growth,”
Federico Alvarez-Demalde, managing director with Oaktree Capital
Management, said.
Houlihan Lokey acted as sole financial advisor to Oaktree and
Ascot Lloyd. Proskauer Rose acted as legal advisor to Oaktree.
Nordic Capital was advised in the process by, among others,
Fenchurch Advisory, Kirkland & Ellis and Alvarez &
Marsal.
There have been several private equity purchases of advisory
firms in the UK. Last October, for example, Further Global
Capital Management bought a majority stake in financial advisor
and tax firm Progeny; in March this year, private equity-backed
MKC Wealth purchased London-based IFA firm Anthony, Bryant &
Company. In January, Verso Wealth Management, the
digitally-driven wealth management group, acquired Pavis
Financial Management Limited.
Such private equity involvement in the wealth and asset
management space has created some concerns. The UK regulator, the
Financial Conduct Authority, is reportedly examining the
trend, pondering potential risks (Financial News, 15
September 2021).
In Nordic Capital’s case, it invests across a variety of sectors,
such as healthcare, technology, industrial and business services,
and financial services. The business was founded in 1989 and has
invested more than €19 billion ($20.7 billion) since that date.
Its most recent entities are Nordic Capital X with €6.1 billion
in committed capital and Nordic Capital Evolution with €1.2
billion in committed capital, principally provided by
international institutional investors such as pension funds.
Nordic Capital Advisors has local offices in Sweden, the UK, the
US, Germany, Denmark, Finland, Norway and South Korea.
The involvement of private equity in wealth management is ironic
in some senses because high net worth individuals, family offices
and others are increasingly keen on private market investing,
attracted by superior yields on such relatively illiquid
investments. A question that advisors have raised in the
past is whether the time horizons of a typical PE fund – such as
five years – align well with the long-term interests of the
end-clients.