Assets Under Management AUM

True Potential sells majority stake to private equity firm Cinven

Details of the sale to the international private equity operator were not disclosed.

True Potential, headquartered in Newcastle, was founded in 2007 by father and son president David Harrison and chief executive Daniel Harrison. It operates in the field of wealth management and provides advice, an investment platform and fund management to more than 1.4 million individual clients.

The company said it has a “highly scalable business model,” having built a bespoke, proprietary technology platform to serve both financial advisors and clients.

The company employs more than 350 people and works with around 800 small advisers. About 20% of the UK financial advisor market uses True Potential’s technology and support services, the company said.

True Potential is expected to have over £ 20bn in assets under management (AUM) and generate c. £ 135 million EBITDA for the year ended December 31, 2021, “reflecting the strong growth of the business over the past five years, during which AUM and EBITDA have increased at CAGRs of more than 30% and more than 40%, respectively ”.

David Harrison said: “We have identified Cinven as the right partner for the next phase of True Potential growth due to its financial services and TMT expertise. His investment will allow us to continue to fulfill our mission of revolutionizing the way wealth management is delivered. We share a common vision and I am confident that this investment in True Potential alongside existing management expertise will enable continued growth for many years to come. “

Daniel Harrison added, “Our goal in this process has always been to find the right partner with the same values ​​that would benefit our clients, financial advisors and staff. In Cinven we have found this partner. The financial advisory and investment markets are constantly evolving but we have grown steadily over the past 14 years by being bold, digitally driven and client focused. This exciting investment and partnership will continue this trend. “

Caspar Berendsen, Partner at Cinven, commented: “True Potential has a truly differentiated business model within the UK wealth management industry, where there are strong drivers of structural growth. The company provides attractive products and services to financial advisors and their clients, using technology to anticipate and meet client demands in the future as well as today.

“The combination of Cinven’s long-standing track record in financial services and TMT, along with True Potential’s strong leadership team and integrated business model, will support the future growth of the company. In particular, this transaction will allow continued investment in the recruitment and recruitment of True Potential financial advisors. its technological platform. “

He added: “The Cinven team looks forward to working with the excellent management team, in particular the founders-owners of the company, to support the existing strategy, building on the growth potential and the significant business successes. “

The deal, which is subject to regulatory approval, comes after Cinven’s recent investments in specialist reinsurance insurer and broker Miller, a global closed-book non-life insurance policy consolidator Compre, the UK consumer credit company NewDay and premium finance for commercial and retail insurance. Premium credit products.

The private equity firm added that the investment also builds on Cinven’s TMT investments in software companies with financial services offerings, including Drake Software, a provider of tax preparation software, and Visma. , a software provider for accounting, tax and payroll applications.

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