Kingswood Group has acquired Hull-based IFA business Sterling Trust.
Sterling Trust operates across five locations across the North East of England. it also employs 22 financial advisers and manages £1.2bn AuM across over 5,000 clients.
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This expands the Kingswood UK regional network to 14 offices and boosts its advisory team to 62 people. Bringing Sterling Trust into Kingswood, funds under management also increase to £4.8bn from around 16,000 active clients.
Buzz West, Kingswood chairman, said: “We hope that you and your family are safe, healthy and coping well through these extraordinary times. I am proud of the way the Kingswood team has come together by staying apart.
“All staff have been working remotely since March and despite our remote locations, advisers have been actively engaged with clients. Plans are now in place to safely return to our office locations in line with government guidance. We are all keen to get out and meet with shareholders and clients in person again – hopefully very soon.
“Despite the restrictions, we are delighted to complete the Sterling Trust acquisition and welcome Jeff Grantham and his team to the Kingswood family. They will be a magnificent addition to our business.”
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By GlobalDataLooking at the deal
Speaking to PBI, Patrick Goulding, group CFO at Kingswood, said: “Sterling Trust is a high quality IFA business which operates from headquarters in Hull, Yorkshire and four satellite offices in Darlington, Newcastle, Sheffield & York providing an opportunity to own a profitable regional financial planning business with built-in expertise and capacity to expand.
“There is also a major opportunity over time to migrate existing and new clients to Kingwood’s extensive and growing range of managed investment solutions on our DFM platform, underpinning the value of a fully integrated wealth and investment management business. Sterling Trust is an established company built by Jeff Grantham over the last 20 years and has grown through organic growth and the diligent acquisition of strong, local financial planning businesses. The company has a highly qualified and experienced team of financial advisers supported by a dedicated technical, compliance and administration team.
“Sterling Trust’s continued success is built around developing and maintaining long-term client relationships, making the company’s culture a perfect fit for Kingswood. The acquisition is immediately accretive to Kingswood earnings.”
On whether we can see more deals, he added: “Yes. We have a strong pipeline of further acquisition opportunities in the UK with three additional transactions under exclusive due diligence.”
James Britton of Peel Hunt, the firm that advised on the deal, explained to PBI: “Getting something of the quality of this as a first big acquisition is obviously helpful. [Kingswood is] no longer the “mom and pop” business. It’s something that’s a real business.”
Kingswood in 2019
Kingswood Group also released its 2019 results. Total revenue for the years was £10.1m, a 34% increase on 2018.
In addition, 83% of the revenue is from recurring business, showing a strong stream of income.
Gary Wilder, Group CEO at Kingswood, added: “Looking back, 2019 was a milestone year for Kingswood. The major commitment of up to £80m growth capital by a global investor such as Pollen Street Capital was a strong affirmation of the vision and strategy set by the Board at the beginning of the year. This level of commitment highlights the growth potential both Kingswood and Pollen Street Capital see in our strategy and the potential to add significant value for shareholders.”
Kingswood is also looking to expand abroad. It finalised its purchase of wealth manager Chalice and also inked conditional heads of terms to take a majority stake in Manhattan Harbor Capital.
