Tavistock Investments has signed contracts to acquire Alpha Beta Partners (ABP), a UK-based asset management firm managing nearly £3bn in assets.
Under the terms of the contracts, Tavistock Investments will pay an initial £6m upon the completion of the deal. The total potential cash consideration is capped at £18m, contingent on Alpha Beta Partners’ financial performance over the next five years.
Through the proposed acquisition, Tavistock Investments aims to scale its asset management capabilities in the UK retail investment market.
The deal also aligns with Tavistock Investments’ strategy to focus on delivering investment solutions to third-party advice firms, networks, and retail clients.
In addition, the proposed transaction marks a pivotal step in Tavistock Investments’ growth. This follows the company’s strategic reduction of its network of appointed representative firms and the recent disposal of its networks of self-employed registered individuals to Saltus Partnership.
Founded in 2017, Alpha Beta Partners specialises in providing a range of outsourced investment propositions to directly regulated advice businesses and appointed representative networks.
Its proprietary Dynamic Asset Allocation process and modular investment solutions offer retail and wholesale investors institutional techniques which are said to be rarely found in this market segment.
For the first nine months of its current financial year, Alpha Beta Partners reported annualised earnings before interest and tax (EBIT) exceeding £500,000 on turnover of over £4m. As of 30 September 2024, the firm held net assets of just over £1.2m.
Alpha Beta Partners managing director Geoff Brooks said: “We are delighted to be joining Tavistock to embark on the next phase of our growth and development, allowing us to continue to both support our existing clients and create new opportunities.
“Our team has been very impressed with everyone we have met at Tavistock and our strategic vision and ambitions are aligned.”
Tavistock Investments expects to receive an initial payment of about £22m for the Saltus transaction by 2 December 2024, with the total consideration of up to £37.75m.
The company retained its profitable divisions, Tavistock Private Client and Tavistock Protect, and aims to expand its service offering in investment management for third-party advice businesses and direct retail clients.
Tavistock Investments chief executive Brian Raven said: “Alpha Beta Partners is joining us at the ideal time.
“Their strategic plans and partnerships gel perfectly with ours, particularly in terms of how to improve investor services and value. We look forward to an exciting future together.”
The Alpha Beta Partners transaction remains subject to approval from the UK Financial Conduct Authority (FCA).
