Jake Elmhirst from Coller Capital goes in-depth with James Dunn from The Inside Network on secondaries as the best-kept secret in private equity. The Inside Adviser
After an extensive search for the right buyer, CBA’s private wealth business has been sold to wholesale advice provider LGT Crestone, with the backing of its blueblood Liechtensteiner ownership group.
Wealth management platforms seeing strong growth
Wealth platforms are seeing strong growth as the country gets ready to open its international borders, post-Omicron. This follows-on from a year of robust equity returns in a new world of tech disruption post-Royal Banking Commission. According to an article in the Australian Financial Review this week, “Australia’s wealth management platforms collectively administered $990 billion in investor assets at September 30 last year.” Platforms are within touching distance of the staggering $1 trillion milestone.
The platform funds under administration (FUA) figure rose by 19.2 per cent over the 12 months to September, to reach $990.1 billion. Just this week, platform operator BT reported that FUA on its BT Panorama platform were $107.9 billion at the end of the December 2021 quarter, up from $104.7 billion in the previous quarter. The firm said it completed, in June, the migration of BT Wrap customers, which added a total of $58.1 billion in FUA, and 151,239 customer accounts, since December 2020.
However, the action is with the new wave of fintech platforms that are more agile and effective. This week Praemium (ASX: PPS) reported record funds under advice (FUA) growth of $49 billion, up 43%, despite posting a net loss of $2.6 million in the first half of the 2022 financial year. The Australian business saw revenue increase by 21% to $30.3 million on the first half of the 2021 financial year. Praemium reported $7.5 million in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) in the first half of the 2022 financial year, an increase of 6% compared to the corresponding period in 2021.
It’s been a remarkable year for Praemium, which saw continued growth in revenue, reflecting ongoing investment in people and technology including the recent acquisition of Powerwrap. In a company statement, Praemium chief executive Anthony Wamsteker said: “We also believe that we are now at a scale threshold at which a significant percentage of revenue will convert to underlying EBITDA, especially since we essentially have a full complement of staff for the first time in the recent past.”
Praemium sits in an attractive position with the sale of its international business segment to Morningstar helping provide confidence in its ongoing strategy by focusing solely on its domestic offering.
Overall, the five largest platforms saw strong growth over the last year and are listed below by FUA.
1. IOOF: $208.8 billion, up 187.6 per cent, pushed higher by the acquisition of NAB’s MLC Wealth, which saw IOOF jump from sixth position on the ladder to become market leader.
2. BT Panorama: $107.9 billion, grew by 17.7 per cent.
3. AMP: $145.7 billion, up 9.7 per cent
4. CBA/Colonial First State: $144.3 billion, grew by 14.5 per cent
5. Macquarie Group: $115 billion, up 30.7 per cent
