AZ Next Generation Advisory (AZ NGA) is at the centre of media speculation, with a US$193 billion asset manager reportedly in “exclusive negotiations” to invest in the firm.
According to the Australian Financial Review’s Street Talk column, 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.
Oaktree Capital was set up in 1995 by co-founders Howard Marks and Bruce Karsh, and has US$193 billion ($294 billion) in assets under management. Based in Los Angeles, it opened an Australian office in 2016, which is led by managing director Byron Beath.
It is believed that a potential deal with AZ NGA is “expected to be signed in the coming weeks”, the AFR reported, with the funds set to be used to aggregate AZ NGA’s network of financial advice and accounting practices. However, the deal is yet to be officially confirmed by either of the two firms.
A spokesperson for AZ NGA told Money Management: “We are always looking at opportunities to grow AZ NGA and enhance our proposition to professional services companies.
“As such, we regularly meet with potential investors and capital partners. We are very pleased with the progress and performance of AZ NGA.”
Money Management also contacted Oaktree for comment but did not receive a response.
AZ NGA is a collective of financial planning and accounting firms run by chief executive Paul Barrett and backed by one of Europe’s largest independent financial services companies, Azimut Group.
The company looks to invest in financial advisory and accounting, small and medium-sized enterprises that are focused on succession and growth, either organically or through acquisition.
Last year marked a highly active period of M&A for the advisory group, as it executed 17 transactions – 13 by its member firms and four by AZ NGA directly. Since it was founded by Barrett in 2015, it has completed over 140 transactions in total.
Earlier this year, the CEO described the activity of M&A in the advice sector as “unprecedented”, particularly as higher education standards post-royal commission have improved the quality of advice being offered in Australia.
Barrett expects the firm to quadruple in size over the next three to five years to create Australia’s leading professional services company, predominantly in the wealth sector.
“We want to stand up as a large, sustainable player in the sector here in Australia and provide quality, profitable services to these thousands of small and medium-sized enterprises (SMEs) that had their tethers to the banks broken,” he told Money Management in October 2023.
Moreover, the firm is executing a “super firm strategy” to help smaller firms create increased scale to continue operating in the long term. Recent M&A activity from AZ NGA include its tripartite deal of Australian Unity’s advice business with Fortnum and its acquisition of Catalina Consultants, an outsourced human resources company.
