Wealth manager Kingswood has agreed to purchase Regency Investment Services, a Surrey-based IFA firm, even as its loss widens.
Transaction details
Founded in 1965, Regency serves individuals and corporates mainly in the Greater London area.
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The firm, run by Dominique Vinecombe, has 12 employees.
These include six IFAs who oversee £320m AUA/AUM for 1,000 clients.
Regency managed £2.6m in total assets and £2.1m in net assets at the end of January 2020.
The Regency deal will boost Kingswood’s assets under advice/management to £5bn from more than 16,000 active clients.
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By GlobalDataIt will also increase the consolidator’s client facing advisory team headcount to 67.
Kingswood will pay £3.45m in cash over a three-year period for the purchase, with £1.38m payable at completion.
The remainder will be a deferred payment, based on Regency’s performance.
An additional deferred amount of up to £1.2m is potentially payable at the end of the three-year period.
Kingswood group CFO and Platform CEO Patrick Goulding said: “The Kingswood model is designed to free Dominique and other advisers to focus on their clients, and provide a centralised, efficient support infrastructure to manage the routine but time consuming tasks required across compliance, finance, human resources, risk and technology.”
The deal is pending regulatory approval.
Kingswood group CEO Gary Wilder said: “We have a robust pipeline of further acquisition opportunities in the UK and US that we are reviewing; and negotiating exclusively with three transactions in the UK.”
Earlier this year, Kingswood acquired Sterling Trust, Chalice Capital Partners and Chalice Wealth Advisors.
Kingswood also increased its interest in Manhattan Harbor Capital and plans to fold Chalice into the firm.
Result
Kingswood’s revenue in six months to June 30 was £8.2m, an increase of 96% from the previous year.
Pretax loss widened to £3.4m from £2.2m over the period.
Administrative expenses increased 60% to £8.4m from £5.3m.
Goulding said: “It is fair to say we are slightly disappointed with the results achieved, with Covid-19 impacting delivery of our revenue targets.
“Whilst in the current environment it is difficult to project expected outcome for the full financial year, Kingswood has completed 3 acquisitions this year which will have a positive impact on FY2020 revenue and EBITDA.”
Head of Wealth Planning
Meanwhile, Kingswood appointed Jeff Grantham as the head of wealth planning. The position is a newly created one.
Grantham, Sterling Trust’s founder, will be in charge of Kingwood’s UK advisory network.
He will manage wealth planning strategy, revenue growth, adviser compensation, asset migration, new business initiatives, and process improvement.
