Kingswood has raised £80 million through the issuance of convertible preference shares to selected investors and funds managed and advised by alternative asset investment management company Pollen Street Capital (Pollen Street).
The finances have secured funding for a pipeline of acquisitions, which has a cost reportedly in excess of £100m, as it aims to find new deals in South-East Asia and North America. The wealth manager has already made an entrance into the US market when it took an initial stake in Manhattan Harbor Capital in May.
As a consequence of the deal, which is the culmination of both investment and rigorous restructuring over the past two years, Kingswood now believes it “has a strong foundation in place to grow and expand”.
The UK-based wealth manager apparently considered a variety of fundraising options through institutional markets and investors but settled on the issuance of irredeemable convertible preference shares. These are convertible into Kingswood ordinary shares at 16.5 pence per share on or before December 31, 2023 almost double the current share price.
Commenting on the deal, Gary Wilder, group chief executive officer at Kingswood explained: “We’re delighted to confirm the fundraising with Pollen Street. We believe they will be an excellent partner as we execute on our shared global vision for the Group. We have been extremely impressed by the depth of their industry knowledge, the thoroughness of their due diligence, and our shared belief in building a best in class global wealth management platform that delivers quality products to clients and outstanding shareholder value.”
Kingswood believes this provided the certainty and timeliness of funds that could not be guaranteed from funding alternatives. Under the terms of the investment, which remains subject to shareholder approval, Pollen Street also has a right to appoint up to two directors to the Kingswood Board.
The acquisition pipeline includes the recent agreement for the business and assets of WFI Financial (WFI), an independent regional financial planning business with £550 million assets under management (AUM) based in Sheffield with offices in Derby, Grimsby and Lincoln. Once the deal is completed, Kingswood will have approximately 5,500 active clients, alongside AUM and assets under advice of £2.5 billion. It also completed acquisitions of Marchant McKechnie in East Yorkshire in Q4 2018; and Oxford-based Thomas and Co in Q1 2019.
WFI is part of the wealth manager’s vision to become a global provider of wealth planning and investment management solutions to clients, with particular focus on developing its technological infrastructure, alongside maintaining an environment of risk management and compliance.
These aspirations have been bolstered by a series of recent appointments, including Richard Jeffrey as chairman of the investment committee, Leigh Philpot as head of client proposition and Richard Klein to expand the firm’s alternative product offerings for its growing client base.
Meanwhile, Najib Canaan joined earlier this year in New York as US chief executive to lead the group’s growth efforts in that market. Kingswood has also entered discussions to acquire a regulated business in Singapore to boost its profile in Asia.
Buzz West, Kingswood chairman, concluded: “We’ve established an experienced team, an expanding product line and an international footprint which solidifies our growth plan. Our core proposition centres on primary offerings in wealth planning and investment management to deliver trusted financial solutions for clients. As we continue into the second half of the year, we look forward to further exciting announcements in terms of both domestic and international expansion and new investment products.”
