The parent company of financial advice group Foster Denovo has acquired more than £800m ($988m, €910m) of assets under advice, following the completion of seven internal practice acquisitions.
In February 2022 Foster Denovo secured up to £100m of funding from US firm Crestline Investors to drive its acquisition and growth strategy as it looks to build on its position as a “major national advice brand”.
The deal saw Crestline take a minority stake in Foster Denovo with the founding leadership team retaining control of the business.
In the past 12 months, Foster Denovo has completed seven internal acquisitions from seventeen advisers, through practice buy outs (PBOs) across both its private client and corporate businesses.
Together, the deals add £5m in annual Ebitda to the business, while boosting the number of Foster Denovo’s employed advisers to more than 70.
Alongside further PBOs, Crestline’s investment will be used to drive external acquisitions across the UK over the next five years, with a number already in the pipeline for 2023.
‘Great option’
Henna Fry, director of corporate development at Foster Denovo, said: “Alongside external acquisitions, we see PBOs both as a great option to offer to practice owners as a way to future-proof their business, and to continue to grow Foster Denovo through the addition of likeminded and culturally compatible people who are looking for a PBO underpin further down the line.
“Our role is to facilitate a smooth transition for those wanting to access a centralised, market leading proposition, giving advisers the tools and resources needed to best serve their clients and to enhance their practice value.
“The motivations for a buy-out are bespoke to each individual or practice, and so each deal will and should look different.
“We pride ourselves on having a flexible model that acts as a facilitator, rather than a consolidator, offering a range of exit options, including a retirement/succession plan for our existing self-employed advisers, or a de-risking option for existing or incoming younger advisers who wish to continue to look after their clients well into the future as part of an enlarged group on an employed basis.”
