International Wealth Management Business: Funding, Growth & Trade Sale

Background

Following a request from an angel investor, Finance Director Richard Preston was brought in to review the finances of an Offshore/ International start-up investment platform, and to identify and implement sources of additional funding to achieve stretching goals.

Making good use of Richard’s extensive experience and wide-ranging skill set, the business subsequently also invited Richard to join the Board as non-exec Chairman.

In this role, he informed and underpinned the company’s growth strategy, direction of travel, and investor objectives, ultimately guiding the founders to a successful launch as a regulated company that became an award-winning market leader.

Challenge

To Richard, with his knowledge of the sector, the company, and the expectations of the original investors, the core challenge quickly became apparent: the time horizon and capital needs of the business exceeded what the angel investors were able to honour.

As a consequence, the business ran the very real risk of failing – and a financial strategy was urgently needed to improve its chances of survival.

Solutions

As a matter of urgency, Richard identified the options and articulated these candidly to the business’s leadership. He recommended a trade sale to raise the necessary funds, or, alternatively closure – a difficult topic, but not one a financial professional of Richard’s calibre could shy away from.

Case Study

Having explained the potential benefits of a trade sale, and secured the business leadership’s backing for it, Richard ran a tight process to find a trade buyer for whom international distribution of wealth management was a strategic imperative.

In this way, he closely matched the characteristics and strengths of the business to the aspirations and objectives of potential buyers, helping to ensure that the transaction would generate maximum value for both parties. He also gave the management team the opportunity to put together an MBO, and engaged with the Regulator to ensure full compliance of all possible outcomes.

This process concluded with a successful sale of the business to a UK institution. But the value Richard added didn’t stop there, as the new trade buyer asked him to step in as CEO.

During this time, he re-engineered the infrastructure with key strategic partners, built a scalable business through international distribution, and steered the company through the challenges and upheavals of a further two trade sales, culminating in a sale to an institution with exceptional distribution power, that saw the true value in the components of the business.

Benefits

In what was a long haul and a slow burn, Richard’s steadfastness and constancy at every stage of the engagement delivered multiple benefits to multiple stakeholders. He achieved a satisfactory if challenging outcome for the original angel investors and founders.

The first and interim trade buyers learnt from the experience and gained value on the sale. The current owner also benefited from Richard’s transition of the business into a key cornerstone of its strategy and proposition going forward.

In short, Richard was able to see the potential of a marketable but underfunded proposition, transform its fortunes by injecting additional funding from innovative sources, and eventually grow it to the point where, today, it serves many thousands of financial adviser clients from Chile to Japan and most places in between.

Click here to view Richard’s EFM Expert Profile