Aviva to step up acquisitions
Allan Griffiths
Aviva has signalled it is on the acquisition trail with a senior appointment to look after future deals.
Andre Carstens has been appointed group director, strategic development, with a focus on mergers and acquisitions, Aviva chief executive officer Allan Griffiths confirmed.
“Andre has worked with us consulting in the past and last year was appointed to work on the annual strategic plan,” Griffiths said.
“However, his role has been expanded, which is signalling that we are looking for acquisitions.”
Carstens had worked at Colonial Investment Management (subsequently Colonial First State) and Avanteos. Until last year he was the chief financial officer of Gribbles Pathology and briefly acting chief executive officer before the company was sold.
Aviva has bought minority stakes in two dealer groups in recent years, but Griffiths said the company was now looking for opportunities in the platform and risk insurance areas.
“Until now, prices for financial services companies in Australia have been too high,” he said.
“We have been looking at multiples of 15 plus, whereas the global multiples have been between five and nine times earnings.”
Griffiths said with a slowing down of the financial services industry in the next couple of years, opportunities would arise.
“There are in excess of 30 platforms, yet the majority of the money goes to the top 10,” he said.
“I think there will be some opportunities in the lower end of the market, but we will not be buying a major player as the cost and integration would not make it worthwhile.”
Last year, Aviva increased its stake in PIS to 27 per cent and recently bought a 25 per cent stake in Queensland-based Financial Technology Securities.
“We will always buy minority stakes to avoid conflicts of interest,” Griffiths said.
“We do not want to turn the group into an Aviva company, but we can bring skills to them, which will help them run a business.”
The move to go on the acquisition trail comes just over a month after the Aviva group chief executive, Richard Harvey, visited Australia.
Griffiths said the expansion plans have the full backing of the UK parent and confirms the intention of keeping the Australian business.
“Aviva is here to stay as Australia has a very attractive mandated superannuation system,” he said.
“Also, Australia is a good indicator of what is happening in financial services and the rest of the global company learns from us.”
Griffiths said there were no acquisitions on the horizon, although it is talking to a dealer group about taking a minority stake, but nothing has been agreed to.
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
