Fund distributor Ganita Wealth has already expressed its intentions to acquire IFA firms in the UK, but it also has plans further afield.
The firm previously confirmed to International Adviser that it was in talks with 25-30 UK advice companies.
It added it will look to bolster its European operation.
‘Huge’ growth potential in Europe
Paul Smith, chief executive at Ganita Wealth, said: “We’ve got plenty of ambitious plans for 2021. I think Europe is the next step. We have got two firms in the Czech Republic that we are looking at, mainly because we’ve already got an office there.
“Germany and France, Portugal and Spain, we probably will look at because of the Qrops market in Europe.
“However, when we’re looking at the domestic markets, we’re looking at the fast-evolving financial services markets, such as Czech Republic and Slovakia. People are starting to do a lot with their investments in these markets.
“We’re definitely going to be looking at those central European countries, mainly for the value.
“It’s a very immature market, so if we can bring a little bit more of the modern approach to these things, I think the growth potential is huge.
“When it comes to acquiring financial advice companies, it will just be Europe and the UK from next year, but Middle East, India and South America will be after that.”
Qrops
While speaking to IA, Smith was highly positive about the qualifying recognised overseas pension scheme (Qrops) market.
He believes that despite the negativity surrounding it, there is a lot of value in the market.
Smith said: “We’ve got the funds from Ganita Asset Management, which we will automatically be distributing within the UK by passporting them in, and we obviously distribute the funds through UK overseas pensions, which is why we’ve got the overseas offices.
“We are very much into the Qrops market with our Ucits funds. While the Qrops market is important for the distribution of our Ucits funds, we also see big value on the UK side. As part of our plans to develop a standalone fund management business, we want to attract a lot of UK fund managers to come and work with us who have Oeics already in the UK.
“But we want them to passport those out to the Ucits market because most of them are not familiar with what is needed at the moment. We’ve got some very talented fund managers who are joining us who are going to be introduced to the potential of the Qrops markets; they’ve struggled to raise money in the UK, and they don’t currently have the capacity to distribute globally.”
“The easiest way to explain the Qrops market is as a way to seed all of our funds. We don’t need passporting to deal with Qrops market, so we can go to anywhere in the world with any IFA that has a Qrops client, and we don’t have to passport into that country.”
Declining market
Smith believes that the declining market has opportunities because international advisers are looking for “new products”.
“Even though it is certainly a declining market, there is still a lot of money that is still being invested and managed through the Qrops market,” he added. “It’s not necessarily new Qrops, it’s existing Qrops as well.
“I think it’s changing. The problem with Qrops was always the advisers getting paid extortionate fees, especially up front, and people not quite realising what they were doing.
“Most of the advisers, or the bad advisers, are probably gone now because that kind of mentality isn’t accepted anymore.
“It’s not as big, and it’s been scarred by its reputation. But I think there’s still a future for the Qrops market. When we say the Qrops, its anybody who has an offshore bond or monthly savings plan.
“I know a lot of the IFAs in the market, and they’re screaming out for new products. Most of our products that we’re bringing in now are going to be ESG.
“I think people want to know that their money is being invested sustainably and ethically. The IFAs and the feedback that we’ve got on the international side, they are absolutely screaming out for the kind of funds that we’re bringing to market.”
Competing in the expat market
The firm’s ambitions outside of the UK are leading them to a declining expat market, where there is not much competition.
Smith added: “I think the problem is, with a shrinking market like that, a lot of the big fund houses have over-stretched a little bit.
“We’re quite a flexible company at the moment, this means we are able to change direction and we’re even creating funds based on a client’s needs.
“The fact that we enjoy good relationships with probably the biggest players like DeVere and Blacktower and similar leading firms and get through to their IFAs and have a chat with them is a big positive for us.
Growth
IA asked Smith what he wants to see in terms of growth in the next three years.
“We want to get the fund platform all done,” he added. “We want 25 funds in the fund platform that we’ve launched, and we’re hoping to do that in the next 18 months.
“We certainly want to have more exposure to the UK IFA market. We want to have a number of IFA firms in that space.
“Our bond is something that we will always use for financing these growth plans.
“As far as distribution is concerned, I want a distribution office in pretty much every major city in the world. We’ve got Dubai, we’ve got India, and Australia is already planned for next year.
“But that doesn’t mean that’s the only three that we’re going to be doing. We’re going to have satellite offices in South America and Africa. We really want to grow this so who knows where we’ll be.”
