Jeff Singh

Sweeping legislative change, rising equity markets and interest from US private equity groups has seen ownership structures in Australian financial services in a state of flux, with the effect felt most keenly at the mid-market level.

These are comments from Jeff Singh, Principal and Managing Director of Chase Corporate Advisory, who pointed to the recent surge in mergers and acquisitions among mid-tier accounting, financial advice and funds management firms as evidence of widespread structural change across the industry.

“There are a number of reasons for the increased activity, but the falling Aussie dollar, rising equity market and significant legislative change are chief among them.

“US private equity firms eager to get a foothold in the Australian financial services sector see real opportunities at the moment, and they are aggressively pursuing an acquisition agenda,” Mr Singh explained.

Mr Singh then said that that the funds management sector is also playing a significant role when it comes to increased activity.

“Fund managers know that they must evolve and grow if they are to continue to remain competitive and keep their slice of the investment market. Particularly as the great big pool of superannuation money grows ever larger.

“We are seeing fund managers take steps to identify boutiques which they can incubate and develop, with an eye to improving distribution on and offshore, as well as diversifying their income streams,” he said.

Mr Singh went on to say that demand for specialist advice has increased markedly as a consequence of changes in the industry, because good advice can make the difference between a successful and an unsuccessful transaction.

“Financial services firms looking at buying, selling or merging their businesses understand that they need advisory firms which specialise in the mid-market level, and which can advise at every stage of the process, from origination of deals, right through to due diligence and execution.

“Chase is one of the few specialists in this area, and as a result we have been overwhelmed by demand for our services. Our pipeline is now in the order of $20 billion in FUA/FUM, something we have never experienced before.

At the smaller end of our deal book, we advised on the sale of Certitude Global Investments to Ironbark Asset Management this week, but our recent transactions are often much larger and more complex, such as the $200 million sale of Crowe Horwath, a listed company, to the non-listed Findex Group,” Mr Singh said.

In conclusion, Mr Singh said that there was no question that changes to legislation, combined with strong performance from equity markets has heralded widespread structural change in the financial services sector, with significant consequences for all players in the market.

“In a market where the only constant is change, it’s really important that financial services firms make use of professional, high quality advice if they are to make the right decisions and remain competitive,” Mr Singh said.

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Specialist corporate advisory firm Chase Corporate Advisory (Chase) has bolstered its senior ranks to capture growing demand from the medium to large financial services sector (financial planning and accounting) for M&A and related transaction services expertise.

The firm today announced the appointment of Greg Quinn as Director – Advice, to lead the growth of its Advice practice (Financial Planning & Accounting). Greg Quinn was previously the Regional General Manager Partnering & Acquisitions at ipac Securities Limited, a wholly owned subsidiary of AMP Limited.

Whilst at ipac, Greg was responsible for growing its national advice footprint via acquisition. In a decade Greg and his team completed more than 75 advice acquisitions, representing in excess of $8 billon of funds under advice.

Mr Greg Quinn said: “I am pleased to join an industry leading team, with deep experience in the rapidly evolving Financial Services and Private Equity sectors. This is an exciting time in the industry where many of our clients are seeking to either grow via acquisition or to divest non-core assets, to streamline their respective businesses. I look forward to working with them through this process.”

Chase is a boutique corporate advisory and M&A business focussed on financial services, private equity, financial planning and accountancy practices sector. The firm acts on behalf of vendors or entities looking to sell, change ownership structure or merge, and also provides significant experience on ‘buy-side’ advisory mandates such as advising Financial Index Wealth Accountants in its recent $130 million acquisition of Centric Wealth from Champ Private Equity. Financial service entities include financial planning practices, licensees, fund managers and superannuation funds and private equity.

PSK Financial Services Managing Director and Co-founder, Paul Aspros said: “Dealing with people who understand advisers and advice businesses makes sometimes tricky transactions run more smoothly. Certainly Greg’s knowledge and background was a key part of PSK being able to complete the SWS acquisition.”

Chase Founder and Managing Director, Jeff Singh, said: “We are excited to welcome Greg to Chase. He brings over  20 years’ experience in financial planning M&A, with experience on both buy- and sell-side of transactions in this niche market. Greg’s appointment will significantly expand our mid-market client reach, broaden our transaction scope and add value to existing clients as they seek to grow via vertical integration or via consolidation.”

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Financial Index Wealth Accountants (“FIWA“ or “Findex”) has entered into a Bid Implementation Agreement (“BIA”) with high net worth advisory firm Centric Wealth Ltd (“Centric Wealth”), under which Findex has agreed to acquire all outstanding ordinary shares issued by Centric Wealth by way of an off-market takeover bid (“Offer”)[1].

Under the terms of the Offer, Centric Wealth shareholders will be entitled to receive 8.9 cents cash per ordinary share.

The Centric Wealth board of directors (“Board”) believes the Offer is fair and reasonable, and has unanimously recommended that shareholders accept the Offer, subject to there being no superior proposal. Centric Wealth’s directors have also agreed that they will accept the Offer with respect to any shares owned or controlled by them, subject to there being no superior proposal.

FIWA founder and chief executive officer Spiro Paule said the transaction would bring together two businesses with a strong focus on providing the highest quality financial advice for clients.

“The combination of the two businesses creates one of Australia’s largest, non-aligned financial advisory organisations,” he said. “We are both focussed on providing the best possible advice and solutions to our clients. We will be able to share respective areas of expertise and offer clients and employees a greater level of sophistication and opportunity.”

Centric Wealth chief executive officer Phil Kearns said the businesses have similar core values and cultures, geared toward providing the highest quality, non-aligned advice for clients.

“We have a strong alignment of values and culture within our respective organisations, and by leveraging each other’s processes we will continue to deliver on our client promise for many years to come. It’s also a win for our staff and shareholders and it will ensure we can develop and improve the service we currently deliver clients.”

FIWA will partner in the proposed transaction with KKR Asset Management, a credit business with $20.4 billion in assets under management that is an affiliate of KKR & Co. KKR provided acquisition funding and KKR will have an equity interest of approximately one-third in the merged group.

“We believe the combined strength of Centric Wealth and FIWA underpinned by the global reach and capability of KKR will create a new force in Australian wealth management,” added Paule.

“We are pleased to support the growth of the combined business and look forward to being a long-term constructive partner to Findex. This transaction further reflects the breadth and diversity of KKR, working constructively on complex transactions around the world,” said Jamie Weinstein, Member of KKR and Global Co-Head of Special Situations.

FIWA was advised by Jeff Singh of Chase Corporate Advisory.

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The firm today announced the immediate appointment of Chris Jordan, AO as Executive Chairman and Andrew Gale as Executive Director.

Chase is a boutique corporate advisory and M&A business focused on the financial services and accountancy practices sector. It typically acts on behalf of vendors or entities looking to sell, change ownership structure or merge. Financial service entities include financial planning practices, licensees, fund managers and superannuation funds.

The firm seeks to capture and service growing demand created by significant consolidation activity within the financial services and accountancy practices sectors.

“The directors of Chase Corporate Advisory (CCA) have extensive experience in strategy, equity capital markets, syndication and M&A, complemented by deep experience and an extensive network of strong & relevant relationships in the Financial Services sector,” said Chase founder, Mr Jeff Singh.

“We are delighted to welcome Chris and Andrew to the firm. Their appointments will significantly expand the clientele served by Chase.”

Andrew Gale has also acquired a significant equity stake in Chase Corporate Advisory. Jeff Singh said “This is a strong indication of Andrew’s commitment to the business.”

Chase Corporate Advisory was founded by Managing Director, Jeff Singh, in early 2011 following a 23 year investment banking career with Barclays Capital, GE Capital and Macquarie Bank Ltd. Chase has already completed eight transactions covering circa $2.5 billion in FUA nationally and has further mandates with circa $6 billion in FUA already engaged.

A number of distinctive elements signify Chase’s services – a tight industry focus; acting on behalf of vendors; strong personal networks of contacts with both acquirer and vendor entities;  the high personal engagement of senior principals; and a very high success rate in achieving outcomes.

Andrew Gale said “Over the next five years in particular, there will be a major change in ownership of both accounting and financial planning practices. For example, over 34% of financial planners are aged over 50, and 14% of all planners are expected to retire or seek a managed exit in the next five years. In many cases, there will also be increasing integration between accounting and planning practices.

“In addition, there is expected to be continued strong consolidation of AFSL licensees, driven largely by regulatory reform, and also strong consolidation in both the funds management sector and superannuation funds sector, driven by industry dynamics. The aim of Chase is to serve vendor or merger clients in each of these areas.”

Chase Corporate Advisory also appointed Richard English as a Director, effective as from July 1. Richard was admitted as barrister in the UK in 1995 and previously had senior roles in the Private Wealth division of Macquarie Bank.

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