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Fairstone is set to boost its growth and acquisition plans after it has secured investment from global private equity firm TA Associates.
The deal will see TA Associates take a significant stake in the business although details of the agreement have not been disclosed.
Fairstone also announced that current private equity backers Synova is reinvesting in the group while current funder Alcentra has also increased funding available to the company for acquisitions.
According to Fairstone, the investment will not affect its business model or buy-out programme other than to create greater capacity to for acquisitions.
Lee Hartley, chief executive officer of Fairstone Group, said: “This is a multi-faceted deal and paves the way for us to march ahead with our build plan with the addition of a tremendously experienced global financial backer in TA.
“We believe they are the right people at the right time to help accelerate our strategy and we can start to put clear blue water between ourselves and some of our peers."
He added: “The combined expertise and backing of TA, Synova and Alcentra means we have a deeper and wider foundation than ever before.
“We’ll use this foundation as a platform to do more deals with an emphasis on ambitious firms that are on a clear upward trajectory. We’re not looking to simply consolidate steady-state businesses – we want to invest in growth.”
In addition, Fairstone’s senior management team has committed to remain with the firm for at least another five to 10 years and reinvested a “significant proportion” of capital back into the business.
TA, which has backed over 25 wealth and asset management firms worldwide, will work with Fairstone’s management team and Synova on its growth plans.
Hartley said the business wants to offer a buy-out opportunity to appointed representatives within networks and deploy its capital into the DFM space.
It also wants to set up a model to allow businesses which it has already bought to perform acquisitions themselves.
Hartley said: “The last few years have shown that sticking to the purity of our model really does drive results.
“We have worked extremely successfully with the team at Synova since 2016 and they have massively helped us to develop the business and played a key role in our transformation. We are delighted to have them remain on board for the next part of the journey.”
Fairstone completed 10 acquisitions last year and expects more deals to pop up in the coming years.
Most recently, it bought south west-based Sovereign Wealth Management in a move that saw 1,500 clients brought to the group.
Last year, Fairstone told FTAdviser it had spent an additional £5.4m on acquired businesses which exceeded their initial target value over the past nine years.
amy.austin@ft.com
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