Nucleus buys its Glasgow provider OpenWealth

Nucleus Financial's Edinburgh HQ

Edinburgh funds platform Nucleus Financial Group said on Monday it agreed to acquire the “UK business and assets of Genpact Wealth Management UK Limited (which operates under the trading name OpenWealth) as they pertain to Nucleus” for £1.5 million in cash.

Based in Glasgow, OpenWealth has provided business process outsourcing (BPO) services to Nucleus since 2011, including account servicing and administration.

Nucleus said: “In November 2018 Nucleus unbundled its technology arrangements from OpenWealth, contracting directly with Bravura Solutions (UK) Ltd.

“The acquisition is the next step in the company’s journey to have increased control over its processes, service offering and product development while continuing to licence its core Sonata software from Bravura …

“The acquisition is expected to be earnings enhancing in 2021 before becoming increasingly accretive thereafter.”

Nucleus CEO David Ferguson said: “Nucleus has continued to grow in recent years, and we expect the greater control afforded by the acquisition to further strengthen our positioning as we pursue our goal of being the most tech-enabled wrap platform in the UK.

“I’m looking forward to welcoming all of our new colleagues into the business.

“The Nucleus / OpenWealth combination has worked well for the better part of a decade and bringing the two together will allow us to focus more than ever on developing our online product and offline service.

“We’ve always believed that the highest service levels are achieved when the online product is so intuitive that the customer hits the button themselves and on the occasions they are unable to do so, that the offline service is exceptional.

“We believe that this deal will kick-start our margin expansion and accelerate growth by moving us closer to having the best product offering in our market.

“Today marks the start of a new stage in our journey, a milestone towards us achieving a market-leading position for our customers.

“Improving the quality and flexibility of what we do will be central to that, and I’m excited by the opportunity this affords us in enhancing the overall user experience and helping us to realise our growth ambitions.”

As part of the agreement, OpenWealth will continue to provide a restricted range of services to Nucleus for 15 months under a transitional services arrangement.

The OpenWealth staff that currently provide services to Nucleus will transfer to the Edinburgh company, taking the combined Nucleus team to 380 people.

“The board understands that for the financial year to 31 December 2019, the OpenWealth assets that pertain to Nucleus generated an EBITDA loss of approximately £2.5 million,” said Nucleus.

“The assets being acquired by Nucleus have no material book value.”

Nucleus Financial’s major shareholder is Sanlam Investments of South Africa.