Investor Group courts institutional backers
Investor Group has placed five million new shares with institutional investors and raised almost $20 million to fund its on-going acquisition strategy and reduce the firm’s existing debt.
“Basically it’s a war chest that we’ve now got to enable us to grow strongly and expand over the next three years, as we believe there’s a huge industry wide opportunity both in the financial planning and accounting space,” Investor Group managing director Kevin White said.
The placement of the five million new shares at $3.65 per share, which represents 7 per cent of the group’s issued capital, was completed yesterday at a discount of about 5 per cent of the day’s closing price.
The group said that several new investors have been introduced to the register while many existing Investor Group investors were also able to increase their holdings.
White said the group would be selective in any acquisitions to be made, although he identified a big opportunity for member firms to growth through piecemeal expansion.
“Privately there are something like 20,000 small accounting practices around Australia and about 90 per cent of them are less than 3 partner firms. We see this as a huge succession planning problem for them and an opportunity for us” White said.
Investor Group, through its 18 underlying accounting member firms (all offer financial advice) and three specialist planning practices, has acquired nine companies to merge into its member companies over the past 12 months.
“In the last 12 months we’ve done more acquisitions but they’ve been smaller, initially when we were growing we were requiring member firms to do larger acquisitions, but what’s happened recently is that member firms have been making smaller investments in their local regions,” White said.
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.
