Meyado to expand UK operations via acquisitions

06.05.2016.

This is the content of an article published by the business platform Merger Market (www.mergermarket.com) in May 2016.

Meyado Private Wealth Management [MPWM], a UK-based fintech business, plans to scale its UK operations via the acquisition of several sub GBP 5m-turnover businesses before taking the model internationally, founder and Director Martin Young said. Regional target advisory mandates could be issued, with the executive adding he is actively searching for targets himself as well as through other means.

Companies located in Birmingham and Manchester are the current focus, with MPWM already securing business partners in London. The plan is to develop a seamless fintech supply chain with other owner-managed businesses seeking to scale their operation, or those that have fallen behind the technology curve. The January 2013 introduction of the UK’s Retail Distribution Review (RDR) has also had an effect on the wealth management space, Young noted.

The endgame is to have a UK-wide business offering client wealth management services to company executives with between GBP 250,000 and GBP 750,000 of liquid assets. Young is leading the charge to find business partners, a term he coined, as the focus will be on the vendor remaining within the enlarged group going forward. There are no plans to enter discussions with sellers seeking to exit their business. With MPWM a late market entrant, the easiest and most cost-effective way to scale operations is via in-organic means, the director said. “I am looking for businesses that have not yet finished (growing) in the space,” Young explained. “I am looking for business partners to be part of a roll-up and collaboration strategy.”

Transactions will be paid for via working capital, with Young ready to use his own cash if necessary. While MPWM is a sub GBP 5m-revenue business, it is owned by GBP 15m-turnover company Meyado Group Holdings. A cash injection could be considered at an unspecified future point, Young said. Further details on the matter were not given.

Meyado Group Holdings, a financial advisory services provider, was founded by Young in Frankfurt, Germany in 1993. Once the UK model is completed, Young intends to replicate the model in other major European cities such as Frankfurt and Madrid, Spain. He is already making efforts in this regard, having had conversations with organisations such as Frankfurt’s chamber of commerce to promote his plan. However, Young was unable to specify when the Continental Europe model will begin in earnest, stating he is “five (UK) deals away” from this occurring.

As reported, increased industry regulations over capital adequacy requirements and client demand for a one-stop service has driven consolidation within the independent financial advisor (IFA) market. There has been a surge in vendor activity in recent years, sparked by RDR implementation. The RDR sought to tighten the structure to those giving advice to the retail market, meaning long-standing IFAs had to undertake exams so as to meet the qualified standard expected of the RDR.

Prior to the RDR’s introduction, up to 25,000 IFAs operated in the UK market, of which approximately 70% were one-to-two-men operations, as reported. A January 2016 UK Financial Conduct Authority statistics document notes the number of financial advisers at that time was 22,557.

MPWM, headquartered in Berkeley Square, London, provides services to around 4,500 clients globally. The company currently has 30 advisors on board, with this figure set to grow by between 10 and 20 personnel per new city opening. Aside from its London office, the company recently named Robert Magee to run its Birmingham operations. Magee formerly owned Robert Magee & Associates, a Herefordshire-based IFA which was sold to AFH Financial [LON:AFHP] in November 2013. At the time of sale, the target managed GBP 27m of funds for around 550 clients, according to an AFH statement. MPWM also has branches in Berkshire and Essex.

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