Gilbert’s AssetCo buys stake in Parmenion Capital

AssetCo CEO Peter McKellar

Martin Gilbert’s investment firm AssetCo plc said on Thursday it reached agreement with Preservation Capital Partners Limited to acquire a 30% equity interest in Parmenion Capital Partners LLP for up to £27.8 million in cash.

AssetCo chairman Gilbert is the former co-CEO of Standard Life Aberdeen (SLA).

The acquisition is conditional on approval by the FCA to the change in controller, which is expected to occur by the end of September 2021.

Parmenion is a FCA registered, B2B fund investment and advisory platform for the wealth and IFA sector, servicing around 1,100 adviser firms and 2,600 financial advisers.

The company was founded in 2007, employs 211 people and is headquartered in Bristol.

Parmenion manages £9 billion of assets and its growth has been driven by its proprietary technology and customer service.

In January 2016, Parmenion was acquired by Aberdeen Asset Management plc.

On June 30, 2021, funds managed by Preservation Capital Partners acquired 100% of the equity in Parmenion from Standard Life Aberdeen plc for a consideration of up to £102.0 million.

For the financial year ended December 31, 2020, Parmenion’s audited statutory accounts reported revenue of £29.8 million and an operating profit of £1 million before certain non-recurring items.

As at December 31, 2020, it had net assets of £10.8 million and had £15.9 million of cash on the balance sheet. 

Following completion of the acquisition, it has been agreed with Preservation Capital Partners that Gordon Neilly, an adviser to AssetCo and former global head of strategy and corporate development at Standard Life Aberdeen plc, will join the board of Parmenion.

AssetCo said: “The board of the company believes that there exist significant opportunities to develop the business of Parmenion further, both organically and inorganically, including deepening its relationship with existing customers and growing its customer base, through on-going technology innovation and by broadening its discretionary fund management and platform offerings to meet customer demand.

The intention is that AssetCo will fund the initial consideration for Parmenion from internal cash resources and marketable securities currently held, totalling £31.6 million.

“In time, it is anticipated that the company will raise additional equity capital further to the permissions granted by shareholders at the general meeting held in April 2021.”

Peter McKellar, Deputy Chairman and CEO of AssetCo, said: “Parmenion is a market leading investment and advisory platform.

“The business has a great opportunity to build on its strong IT and client focused foundations, given the digital transformation we are seeing within the asset and wealth management industry.

“The company has the people and expertise to grow and to continue to deliver for advisers and customers, as they seek to achieve their long-term investment objectives.

“Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers.

“It is intended that this will be achieved through the acquisition, primarily, of majority stakes in selected businesses which play into these structural shifts and supported by strong distribution to drive organic growth.

“Few businesses will divert us from this approach, but we were compelled by Parmenion’s market positioning, strong growth potential and excellent management team and on this occasion we are delighted to have secured a significant minority interest in conjunction with Preservation Capital Partners.

“We are looking forward to working with Preservation Capital Partners and the Parmenion team in building the business and delivering value to investors and AssetCo’s shareholders.”

Standard Life Aberdeen (SLA) CEO Stephen Bird said: “The completion of the sale of Parmenion is a step forward in simplifying our business and delivering on our strategy.

“Financial adviser technology will be a key engine of growth in the UK wealth and savings market.

“By focusing on our award-winning Wrap and Elevate platforms, we are best placed to capitalise on this opportunity.

“Parmenion has had great success during its time as part of the SLA group and we wish the team well on the next stage of their journey with Preservation.”