Private equity as an asset class has had a deep impact on the financial services landscape over the past decade.
It is private equity money that backs many of the consolidators sweeping up IFA practices around the country, or funding the start-up firms challenging the incumbents.
And more recently, asset management firms have been getting in on the act, launching funds for advised clients that aim to invest in private equity and debt.
But private equity’s impact has not been confined to financial services, with a slew of UK-listed companies and sporting events also being bought by private equity firms.
Bringing those themes together is the consortium of private equity firms that has agreed to buy FTSE 100 financial services firm Hargreaves Lansdown for £5.4bn – an offer that was accepted by the board last week.
Private equity is a broad term and the trio of firms that have come together to bid for Hargreaves Lansdown are Nordic Capital, CVC Capital and Adia, a sovereign wealth fund administered by the government of Abu Dhabi.
FT Adviser understands none of the three companies in the consortium is to be regarded as a controlling shareholder.
Looking into the consortium
Nordic Capital has assets under management of £26bn, with over £2bn of this invested in what it considers to be financial services businesses since 2012
FT Adviser understands Nordic Capital is particularly keen on financial advice businesses in the UK as they regard the industry as fragmented, and with demographics as they are in the UK, to have structural growth characteristics.
Among the UK financial services businesses to which it has exposure is Ascot Lloyd. Ascot Lloyd was acquired in April 2022, and FT Adviser understands that Nordic Capital regards itself as being in the early stages of its plans for Ascot Lloyd and not wishing to be judged on the performance of that business yet.
FT Adviser understands that its priorities with Ascot Lloyd are to help develop its technology, and to grow both organically and inorganically.
Since the start of 2023 the company has launched its own platform and bought an IFA business in Swansea.
It previously owned Nordnet, a digital investment platform operating in Scandinavia. It has more than 1mn customers, and while its savings and investment business has much in common with the offering of Hargreaves Lansdown, it also offers loans. Around 6 per cent of the population of Sweden are customers of Nordnet.
The second company in the consortium, CVC Capital, is a Luxembourg domiciled private equity business that has AUM of about £110bn.
CVC was formed as the result of a spinout of the private equity business of Citibank and owns assets as diverse as motor breakdown group RAC and the Six Nations Rugby Championship.
