A funds platform which counts hundreds of independent financial advisers among its shareholders will launch a London float next week that could value it at £150m.
Sky News has learnt that Nucleus Financial, which is based in Edinburgh and has more than £13.5bn of assets under administration, intends to unveil an initial public offering on the junior AIM market on Monday.
The deal, which will involve raising about £25m from the sale of shares in Nucleus, will be one of several similar businesses going public amid signs of increased demand from investors.
The retail advised platform market is predicted by analysts to be heading for rapid growth over the next five years to more than £900bn, with technological overhauls putting £260bn of clients’ money “at risk of disturbance”, according to Nucleus’s annual report.
Nucleus’s “wrap platform” enables its clients – several thousand independent financial advisers (IFAs) – to offer their customers access to investments including ISAs and pensions from a single place.
The company, based in Edinburgh, has considered an IPO in previous years, but decided that the payment of its maiden dividend last summer was a logical milestone to begin formal preparations to go public.
It recently announced financial results showing a 21% revenue increase last year, with operating profit up 19% to £5.1m.A big stake in Nucleus is owned by Sanlam, the international financial services group, with one insider describing an IPO as providing an opportunity to simplify the company’s shareholding structure.
Announcing the dividend distribution last August, David Ferguson, Nucleus’ founder and chief executive, said: “Following five consecutive years of increasing revenues and profitability that has seen the business become debt free with over £15m in cash reserves, Nucleus is better positioned than ever before to take advantage of the significant growth opportunities in the platform sector.”
A listing will make Nucleus the latest in a string of independent funds platforms to turn to the public markets amid growing demand for advice from investors.
IntegraFin Holdings, which trades as Transact, floated earlier this year, while AJ Bell, which oversees assets worth nearly £40bn, plans to go public in the coming months.
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Michael Spencer, the City billionaire who ranks among the most successful financial sector entrepreneurs of his generation, has agreed to buy a stake of about 3% in AJ Bell as part of its IPO.
When it does float, it will turn founder Andy Bell into one of the stockbroking sector’s wealthiest entrepreneurs, as well as yielding windfalls for some of the City’s leading fund managers. A Nucleus spokeswoman declined to comment on its float plans, which are being handled by the broker Shore Capital.
Source: Sky