Assets of discretionary investment firms that are currently up for sale look overpriced, according to Ashcourt Rowan chief executive Jonathan Polin.
His comments come as the chief said raising assets to £10 billion was top of his list of targets on a three-year view.
Achcourt Rowan is on the acquisition trail. Following the company’s recent purchases of UK Wealth Management and Generali Portfolio Management, Polin is looking to take advantage of further displacement in the sector
Polin (pictured) said he would be interested in deals across all three of the company’s core areas: corporate pensions, financial planning and discretionary management.
However, he believes financial planning assets currently look the most reasonably priced, particularly as the retail distribution review (RDR) legacy trail sunset clause finishes in 2016.
‘Discretionary assets are still expensive and getting more expensive, but financial planning assets are levelling out. Part of that is because of the [RDR] sunset clause in 2016, which means people are not wanting to overpay,’ Polin told Wealth Manager.
He said the integration of UKWM and Generali Portfolio Management is progressing well, with the former on target to deliver synergies of £2.25 million over the course of the year.Polin’s comments follow Ashcourt Rowan’s full-year results in which the company moved back into the black over the six months to the end of March with a pre-tax profit of £0.5 million. Assets under management and influence are around £5.2 billion, of which £2.2 billion are run on a discretionary basis.
The results are a milestone for Polin, three years since he took over the business and introduced far-reaching measures to make it profitable and well positioned for the post-
Looking ahead, he described the sweeping Budget pension changes as a ‘once in a lifetime opportunity’ for the wealth and asset management sectors, as well as for financial planners.
‘This is the most exciting opportunity in the outside market place,’ he added.
Internally he anticipates revenue growth will come from moving existing clients to ongoing service agreements and its internal discretionary service. This has already boosted revenues and Polin said it is a process that will gain momentum.
At the beginning of the year, the asset management arm had around £3 million of trail left in the business, which is now down to £1 million. The group is aiming for this figure to be down to zero by the end of the year.
Polin highlighted the group’s target to achieve an operating margin of 25%. Currently 18%, he said it is halfway through this journey.
Ashcourt Rowan also aims to grow assets to £10 billion over the next three years by taking advantage of acquisition and organic growth opportunities.