AZ NGA’s Paul Barrett unpacks why the firm is the right home for 16 AMP-aligned advice practices and how its M&A history will facilitate the long-term growth ambitions of each business.
Last Thursday (8 August), it was announced that AMP had sold its minority stakes in 16 practices to AZ NGA for $82.2 million.
Simultaneously, Entireti – the parent company of Fortnum Private Wealth and Personal Financial Services (PFS) – will acquire AMP’s advice licensees and Jigsaw for $10.2 million, with AMP retaining a 30 per cent stake.
Reflecting on the transformative deal, AMP chief executive Alexis George told Money Management: “We felt we weren’t the right owner for those businesses. It’s a good time for advice so some of those businesses are looking to grow and need capital for that, so we wanted to find a big player who could really put ample capital behind them for growth and succession opportunities.”
As the dust begins to settle a week later, AZ NGA chief executive Paul Barrett has detailed to Money Management why AZ NGA is the ideal home for these 16 advice practices.
Recognising the excitement surrounding the announcement, he said: “It’s great to be involved in an M&A transaction where every single party walks away saying, ‘We got what we wanted.’ Whenever you can create a win-win transaction, you know you’ve done a good job.
“To get almost universal acceptance and excitement [about the deal], I don’t think I’ve seen anything like that in my career. It’s been a brilliant partnership with AMP.
“We are just so thrilled to be able to invest in such quality organisations, and brick by brick create a substantial financial services company.”
While AMP operates four key business divisions – advice, AMP bank, platforms, superannuation and investments – AZ NGA is purely focused on advice, the CEO noted.
“That is all we do – we’re a specialist in working with financial services professionals who run SME businesses. We offer a range of services to help them build bigger and better businesses.
“Ultimately, these 16 firms in the portfolio have all the same problems and ambitions that our core firms in the AZ NGA portfolio have. We are very accustomed to working with them and solving those problems around succession and growth,” he said.
By understanding the individual goals of all 16 equity firms, AZ NGA plans to “seize the day” by assisting each business to achieve their growth ambitions.
Last December, the CEO explained why he believes an “army of large, corporatised super firms” is the future of advice businesses to financially prepare more Australians for the future.
Barrett continued: “[These practices] want to seize the day and build super firms. There’s a huge alignment between what they are trying to do and what we’ve been doing with our firms already.
“If you want to create something great, you don’t do it by sitting back and looking at the view. You have to seize the day. We are not sitting back watching. We are getting very busy, and we intend to take advantage of every opportunity that is out there.”
Moreover, Barrett reflected on the broader shift occurring in the advice profession currently as new players take over from previous “household names”, such as AMP and Insignia Financial.
“There are a number of new names now that are popping up as the new owners of the advice profession. Some of those old names aren’t playing in that space anymore. There’s a major shift happening, and these new players will dominate it for the next phase of the sector.
“Obviously we want to be one of those. We think that Matt Lawler, who’s working with Neil Younger at Entireti, will build a new brand that will be an organisation of substance.”
Backed by ample capital
Echoing George’s comments about finding a “big player” with access to ample capital, AZ NGA is backed by Azimut Group, one of Europe’s largest independent financial services companies with over €100 billion ($165 billion) in assets under management.
“From a capital point of view, we have very deep pockets and can sustain the growth ambitions by providing debt and capital solutions to these 16 firms for the long term,” Barrett said.
According to recent media speculation from the Australian Financial Review, US-based global asset management giant Oaktree Capital Management is potentially having “exclusive talks” with AZ NGA to come in as a growth equity partner.
Although Barrett didn’t confirm the speculation, he hinted at future capital sources partnering with the firm in the future: “If we bring more capital in from other sources, which has been discussed in the media lately, then that only adds to that. Our financial resources are extensive and will be able to sustain the growth for many years to come.”
Carpe diem!