MDA firm sets up seed funding partner


By Julie May

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Listed managed discretionary account (MDA) operator Managed Accounts Holdings has established a subsidiary in order to partner with advisory firms looking to acquire advice or portfolio management businesses, the group announced yesterday.

Managed Accounts Holdings said the wholly-owned Planner Holdings Limited (PHL) would be funded with up to $5 million from the business’s current cash reserves to provide expansion capital to selected financial advisory firms.

“PHL will initially hold up to a 25 per cent interest in new acquisitions,” the group said in a statement, adding PHL would have the option of acquiring additional shares up to a maximum of 50.1 per cent.

Managed Accounts Holdings executive chairman Don Sharp said advisory firms were increasingly seeking to expand through acquisition but many weren’t confident about how to do it or who to partner with.

“The type of advisory firms that would look to partner with PHL would likely have a large existing self-managed super fund (SMSF) client base or clients who may establish an SMSF in the future,” he said.

Principals would have a sharp focus on growth, with a strong desire to maximise efficiencies and profitability, he added.

Managed Accounts Holdings chief executive David Heather said it was intended that the advisory firms use the funds from PHL’s investment and consider matching new capital with bank borrowings to fully fund their acquisitions.

The group said it planned to retain a 25 per cent interest in PHL but it was expected the PHL board would seek to list separately on the Australian Securities Exchange within two years of an initial investment in an advisory firm.

Further, the company said PHL would not seek to control or influence the board or management of the advisory firms it partnered with, but would fully support their independence.

Meanwhile, Managed Accounts Holdings said earlier this week that it had agreed in principle to build and implement customised managed account solutions for two boutique financial advisory firms that would drive the group’s total funds under administration (FUA) beyond $2 billion.

The two boutique licensees, which Heather could not name, planned to migrate the majority of their FUA onto the solution over the next two years.

The organisation was in the process of building the bespoke managed account service for each new licensee after successfully implementing an MDA service for Gold Coast-based dealer group MyPlanner Australia earlier this year.

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