Fund management giant Invesco today scooped up Intelliflo, a software business serving financial advisers, for around £200m, City A.M. understands.
London-headquartered Intelliflo provides office software to help businesses such as wealth managers, advisers, insurance companies and brokers manage and keep track of their clients' investments.
It also creates products for the end investors, such as client portals and automated "robo-advice" sites. Around 2,200 firms are using its technology, and a third of all UK advised wealth runs through its platform.
"The starting point for the deal was the similar cultures of both businesses," said Intelliflo's executive chairman Nick Eatock. "We think the financial adviser is key, and most of Invesco's funds are distributed through advisers."
City A.M. understands that a number of other bidders, ranging from insurance companies to private equity firms, were also vying for Intelliflo as its private equity owner Hg Capital put the business on the block.
Hg originally invested in 2013 through its tech-focused Mercury 1 fund, which has now sold six of the companies it bought and has already returned investors 3.4 times their money.
Atlanta-headquartered Invesco, which had around $973bn (£724bn) in assets under management at the end of April, is hoping that the deal will help financial advisers serve more clients – so more wealth will eventually be directed to managers such as itself.
"We fully recognise that digital solutions are increasingly important, as we seek to improve the support we provide for advisers to help them and their clients achieve their desired investment outcomes," said Invesco's chief executive Martin Flanagan.
Eatock added: "One of the problems in the UK is that not enough clients receive financial advice. We want financial advisers to be more efficient through the use of software so they can provide more advice to more people."
He said automated advice would be a key part of this, especially for clients who may not have as much money to invest and cannot afford face-to-face interactions.
Fund managers such as Invesco have increasingly been looking to either consolidate or acquire businesses in profitable areas such as software, as they face cost pressures from increasing regulation and competition due to a regulatory push for greater fee transparency.
Yet Eatock was adamant that Intelliflo would be able to retain its independence, and would never aim to drive business towards one particular fund platform.
Behind the Deal
Ollie Clayton, Evercore
- Some of the major deals in the UK wealth and asset management sector over the last few years have been overseen by investment bank Evercore, including the £600m sale of Towry to Tilney in 2016.
- The trickiest bits of the deal, according to Evercore’s senior managing director Ollie Clayton, were caused by the fierce demand for Intelliflo. “Trying to find the best buyer for the business as well as getting the best price for Hg and the shareholders was probably the biggest challenge,” he told City A.M..
- An evening off is what Clayton is hoping for now the deal has closed. The banker, who describes himself as a “mad keen sportsman” who will take part in “anything that involves chasing a ball”, laughed off City A.M.’s suggestion of a wild party to celebrate but conceded it would be “nice to have a few drinks”.
- The “dream team”, in Clayton’s words, who accompanied him on the deal included vice presidents Demetris Efthymiou and Jamie Prescott and analyst Charles McMillan. He said all of them worked “incredibly hard”.