In public markets, this results in the share price taking a bashing – the market-leading adviser platform now trades on about 1.5 per cent of assets under administration, which is down from 4 per cent – but the outcome is less clear for PE-owned firms.
Outcomes will vary, but with crashing inflows, lower forecast exit multiples (see Integrafin, AJ Bell and others) and squeezed margins (driven in part, as we have seen, by the flow of PE money in the adviser sector), much will depend on owners’ investment horizon – especially given the diminishing appetite for PE-to-PE deals.
Who knows how this all plays out. But whatever happens, alignment of interest (and incentives) will surely be the defining factor.
David Ferguson is chief executive of Seccl. He previously founded and led Nucleus since its launch in 2006 until its sale in 2021 to James Hay
