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AJ Bell makes triple acquisition in bid to rival Hargreaves

Platform looks to take on rival with its own asset management division following acquisitions.

 
AJ Bell makes triple acquisition in bid to rival Hargreaves

Platform and Sipp provider AJ Bell has bought three companies in a bid to challenge Hargreaves Lansdown by launching its own asset management business.

The company has bought discretionary fund manager Mansard Capital and passive fund provider Indexx Markets in a bid to challenge its platform rival by offering its own range of passive funds and in-house managed portfolios to users.

It has also acquired asset management consultancy Allium Capital, which is a subsidiary of Indexx Markets. Allium runs a range of six risk-rated funds called the FP Multi-Asset DRP funds.

AJ Bell’s head of investments Alex Dymock will run the new business. He will report into AJ Bell chief executive Andy Bell (pictured).

In November last year AJ Bell announced that it planned to launch a managed portfolio service but gave no further detail.

The fund range and managed portfolio service will initially be sold through financial advisers but will later be offered to retail investors. The portfolios will be made up of AJ Bell passive funds, which will also be available as stand alone vehicles via the platform.

The Allium multi-asset funds will also be available and there are not yet plans to rebrand them.

A source familiar with the situation said AJ Bell wanted to challenge Hargreaves Lansdown, which last year set up its own series of managed portfolios which invest in the company’s own range of multi-manager funds. The Bristol-based broker also offers a range of risk-rated model portfolios which invest in other funds.

‘Hargreaves has quietly been building an asset management business itself in recent years, and now has over £5 billion in assets in this business. AJ Bell has looked at this and believes there is no reason why it cannot do the same,’ they said.

‘If you look at AJ Bell it currently has £26 billion of assets, which is around half of what Hargreaves Lansdown has.’

The deals have been completed but are awaiting approval from the regulator.

AJ Bell has looked to grow through acquisition in the past. In 2012 it bought financial publishing business MSM Media to offer investment writing to its users.

Last June fund manager Neil Woodford invested £21 million into AJ Bell. He previously invested in the company when he was a fund manager at Invesco Perpetual.

Invesco is currently the largest single shareholder in the company with 39% of the company’s share capital. Woodford Investment Management holds 8% of the shares.

4 comments so far. Why not have your say?

Hampshire cynic.

Jan 21, 2016 at 15:13

Methinks that A J Bell will have a hell of a job to match the overall offerings of Hargreaves Lansdown. Charles Stanley have tried, but, as yet cannot quite match the HL service standard.

Having said all that I am not much of a fan of multi manager funds which tend to fall short of DIY selections in past performance terms, mainly because of the double dose of fund management charges which have to be inflicted!

As a shareholder of HL I should be pleased that they have this easy income stream, but whilst I still have the odd brain cell I enjoy constructing my own portfolio which sometimes, but not always follow the HL selections and their Wealth 150+ generally.

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Tom Dhu

Jan 21, 2016 at 17:12

Sure H-L are fantastic in terms of client service hence their high charges. They also must spend a fortune on mail outs.

The AJB model is ultra low cost but no frills service and it has been very successful.

Since they revamped their web platform it has provided more information and is easier to use.

The AJB back-end systems are used by other providers such as Barclays Stockbrokers.

I think they will give H-L a real run for their money.

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Raj Patel

Jan 21, 2016 at 23:14

Wish him allthebest

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Slickness on

Jan 23, 2016 at 20:52

As a user of both A J Bell's Youinvest platform and HL's online broker service, I would say that HL have access to more research and pseudo advice, but the Youinvest platform is much easier to use and is catching up fast in terms of content and research access.

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