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Private equity firm seals £206m deal for Saunderson House owner

Private equity firm Epiris has struck a £206 million deal to buy Saunderson House owner IFG Group.

Private equity firm seals £206m deal for Saunderson House owner

Private equity firm Epiris has struck a £206 million deal to buy Saunderson House owner IFG Group

Epiris, which was formerly know as Electra Partners, is paying a 46% premium to IFG's closing share price of £1.325 of 22 March. 

IFG, which also owns Sipp provider James Hay, accompanied the news with its full-year results showing adjusted operating profit rose 18% to £12.4 million in 2018. Revenue increased 12% to £87.6 million. 

As at 31 December 2018, IFG had £30.2 billion of assets under administration or advice. James Hay accounted for £25.3 billion of this and Saunderson House £4.9 billion. 

Commenting on the deal, IFG CEO Kathryn Purves told the market: 
'The offer by Epiris represents a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding in IFG today. 

'In addition, our employees and clients will benefit under the ownership of Epiris, which should help accelerate the delivery of IFG's strategic objectives and the underlying strategies of James Hay and Saunderson House.' 

Epiris' Owen Wilson added: 'We are excited to work with management to realise the growth potential of James Hay and of Saunderson House and to further enhance their position in their respective markets.'  

IFG results showed retaining Saunderson House had cost the business £3 million. 

IFG had scrapped its planned sale of the business in April 2018 after failing to find a suitable buyer following huge interest. 

IFG said Saunderson House attracted 239 new clients in 2018, which, while slightly down on the 247 in previous year, was a 'strong result' given it had not been able to sell the business. 

Saunderson House managed to grow revenue 7% from £32.2 million to £34.3 million in 2018, but its profitability fell from £8.6 million to £7.1 million, excluding one-off retention payments of £3 million. 

IFG believes Saunderson House is well-positioned to thrive after a tricky 2018. 

'Following a comprehensive review of its strategy, Saunderson House expects to see its discretionary proposition continue to grow, enabling the business to attract younger clients at the wealth accumulation stage of their life,' IFG said.

'This strategy is expected to continue to enhance and embed long term value in the business with clients accumulating wealth with Saunderson House and remaining clients for a significant period of time.' 

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