20th November 2024
Progeny, a leading consolidator in the financial advice sector, has announced that it has spent over £237m on adviser buyouts since receiving private equity backing from Further Global Capital Management in April 2022. This aggressive acquisition strategy has increased its assets under management (AUM) from £1bn to an impressive £9bn, reinforcing its position in the wealth management industry.
Key deals in 2023 included the £58m acquisition of international advice firm The Fry Group, £27m for Nottingham-based wealth manager Fiscal Engineers, and £25m for Edinburgh’s Carbon Financial Partners. These acquisitions followed a series of deals in 2022, notably a £51m purchase of Balmoral Asset Management.
The acquisitions have been supported by a combination of equity funding from Further Global and debt facilities from US credit specialist Ares Management, which is known for its involvement with other UK consolidators. Progeny’s financial framework includes private fund Pegasus FG Holdco LP and its parent company, Pegasus Bidco, with significant loans issued at interest rates exceeding 12%.
Despite a substantial increase in turnover—doubling to £54.1m in 2023—Progeny reported pre-tax losses of £32.4m, primarily due to amortisation costs associated with its acquisitions. Nevertheless, the business noted improvements in its underlying trading performance, highlighting profitability when excluding amortisation, depreciation, and exceptional items.
Progeny’s recent acquisitions exemplify the accelerating trend of consolidation within the wealth management sector, driven by private equity funding and the need for scale.
Firms like Progeny, with strong backing from private equity investors such as Further Global, are pursuing strategic acquisitions to expand their assets under management quickly, broaden their service offerings, and strengthen their market presence. This strategy responds to the increasing demand for efficiency, integration, and competitive advantage in a rapidly changing industry.
However, consolidation requires careful navigation, including cultural integration, client retention, and managing regulatory complexities and debt obligations. For firms considering their next steps, partnering with the right organisation is crucial to preserving their values and achieving long-term success.
At Chapters Capital, we specialise in financial planning and wealth management M&A, supporting firms navigating similar transitions or growth opportunities. Whether you are considering a sale, merger, or expansion, contact one of our professional associates today for a confidential, no-obligation consultation to discuss how we can help you take your next steps.