Managed Accounts Holdings to invest into advisory firms


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April 23, 2015

Listed managed discretionary account operator, Managed Accounts Holdings Limited (MGP) has announced plans to partner with advisory firms to acquire quality advice or portfolio management businesses.

MGP has established a wholly-owned subsidiary, Planner Holdings Limited (PHL) which will be funded with up to $5 million from MGP’s current cash current reserves to provide expansion capital to selected financial advisory firms.

PHL will initially hold up to a 25 per cent interest in new acquisitions. The purchase price is expected to have an after-tax PE of 8.57. PHL will also have the option of acquiring additional shares up to a maximum of 50.1 per cent at a later date.

Don Sharp, MGP executive chairman, said advisory firms were increasingly looking to expand through acquisition but many weren’t confident about how to do it, or who to turn to and partner with.

“The type of advisory firms that would look to partner with PHL would likely have a large existing SMSF client base or clients who may establish an SMSF in the future. Principals will have a sharp focus on growth with a strong desire to maximise efficiencies and profitability,” he said.

MGP chief executive officer David Heather added that it is intended that the advisory firms use the funds from the investment by PHL and consider matching the new capital with bank borrowings to fully fund their acquisitions.

PHL has been established by MGP on the expectation that the PHL board will seek to list it separately on the Australian Securities Exchange within two years of its initial investment in an advisory firm, with MGP planning to retain a 25 per cent interest in PHL.

PHL will not seek to control or influence the board and management of the advisory firms which it partners with but will fully support the independence of underlying firms.


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