Bestinvest provides a broad range of services for private investors including investment advice, financial planning and investment management. The exit will generate total proceeds of approximately £45 million (conversion), with £25 million going to 3i and £20 million to limited partners in the firm’s fifth European fund. The transaction is subject to change of control clearance by the UK’s Financial Conduct Authority, were undisclosed.
Permira and 3i both declined to comment.
3i invested in Bestinvest in August 2007 to support the company’s growth strategy and strengthen its market position in the UK wealth management industry. Under 3i’s ownership, Bestinvest strengthened its executive team by appointing a new chief executive officer and chairman. 3i also helped Bestinvest grow through its online investment platform and the creation of a national adviser network through the 2010 acquisition of Haines Watts Financial Services.
“During 3i’s investment, Bestinvest has been transformed as a business and continued to grow, despite some challenging times in the financial markets,” Ian Lobley, a partner at 3i, said in a statement. “Today Bestinvest has around £5bn of funds under management and a strong reputation in the industry.”
The UK wealth management industry offers attractive growth dynamics, according to a Permira statement. Despite recent consolidation it still remains very fragmented with a long tail of subscale firms with under £3 billion of client assets, the firm added.
“The business is in a strong position to play a key role in further industry consolidation and we look forward to backing [the] team in this exciting next phase of growth,” Philip Muelder, a partner at Permira, said in the statement.
Permira made the investment from its Permira V fund, which held a €2.2 billion first close in April. The firm, which has been in market since September 2011, is currently trying to collect between €4 billion and €5 billion for this vehicle. Following the acquisition of Bestinvest, Permira V has made two acquisitions. Last month, it bought UK boots maker Dr. Martens for approximately £300 million.
Bestinvest and 3i were advised by Evercore and Macfarlanes. Permira was advised by Fenchurch Advisory Partners and Freshfields Bruckhaus Deringer. Bestinvest’s management was advised by Jamieson Corporate Finance and DLA Piper.