Dec 28, 2021

Katey Pigden – Illustration by Dan Murrell As seems to have become tradition in platform land in recent years – we’ve seen plenty of interesting deals throughout 2021. Of course, no transaction of this kind is without its challenges. It took longer than the companies may have liked to get the deal over the line as some Nucleus shareholders and staff members had raised concerns. The proposed purchase was changed to a ‘takeover offer’ instead of a ‘scheme of arrangement’ deal after a low voter turnout from Nucleus shareholders. Although, the two companies insisted the change would provide “greater certainty”. By August, the deal had received the green light from the Financial Conduct Authority. It paved the way to create a £47bn adviser platform. Often when one company buys another, you might expect the purchaser to ensure its name stays above the door. Or to opt for a new name altogether. But on the same day approval was granted, Money Marketing was able to reveal the Nucleus name had been chosen for the combined company. No doubt much to the relief of Nucleus supporters. There was speculation as to whether Nucleus founder David Ferguson would stay on. A month later he declared he had decided to leave the platform to “pursue other opportunities”. We look forward to seeing what the future holds. Group chief executive of James Hay, Richard Rowney wasted no time in getting his senior team in place. Money Marketing secured the first major interview with the boss, since he entered the world of platforms, having previously been at the helm of insurer LV=. He indicated the James Hay platform will be first in line for any technology upgrade once things have settled down with the Nucleus acquisition. Rowney said: “James Hay is the business that has the burning platform. Most of the advisers using James Hay know we need to do something better with our technology. “Our focus will be on that side of the business, certainly for the foreseeable future.” James Hay has formed a strategic partnership with FNZ, which will eventually see the two platforms migrate to FNZ technology. But for now at least, they will continue to operate separately. “Those things take a reasonable amount of time to design and to build and to get right. I think you’re talking summer of 2022, before you get to a point where we’ve got effectively a new platform that we can have out in the marketplace,” Rowney explained. Alphabet soup Platform technology provider FNZ hit the headlines several times in 2021 (at least on Money Marketing) for its own reasons. It’s been almost two and a half years since FNZ first announced it had acquired rival firm GBST for around £150m. The Australian supreme court of New South Wales may have given its seal of approval for the deal, but here the purchase raised competition concerns. And so, the Competition and Markets Authority (CMA) launched an in-depth investigation just days later. FNZ didn’t hold back and accused the CMA of being “inconsistent” in the way it assesses harm to consumers. The competition watchdog even admitted it had “identified certain potential errors” in its market share calculations. But despite this, in its reassessment of the deal, the CMA confirmed it would require FNZ to sell off GBST to allay competition concerns. This time it said FNZ would have the option to “repurchase certain parts” of the business. The limited set of assets would need to relate to GBST’s capital markets business. They would be restricted to those that do not affect GBST’s competitiveness in the supply of retail investment platform solutions, the CMA ruled. As this year draws to a close, the saga has finally reached a conclusion. On 22 December it was announced FNZ completed the sale of GBST to Anchorage Capital Partners and will acquire GBST’s capital markets division. Prior to its acquisition by FNZ, GBST engaged in negotiations with, and had received bids from two other parties: Bravura and SS&C Technologies. Those two firms have had their own news this year. He was replaced by Nick Parsons, who joined the firm in 2007 as chief technology officer. Parsons moved up to business development director, before he was appointed global chief operating officer last year. Meanwhile earlier this month, SS&C Technologies announced it will buy challenger platform Hubwise for an undisclosed sum. Back in February, Hubwise said it was looking to double its assets under administration by the end of the year, as the firm’s chief executive told Money Marketing its proposition “sounds too good to be true”. More deals But that’s not all. We’ve also seen some other prominent deals in the market. In May 2021, there were rumours Embark could be taken over by Lloyds Banking Group in a transaction worth around £400m. It was one of our most read stories of the year. By July the deal had been confirmed . Asset manager Franklin Templeton, which acquired Legg Mason last year, was the  largest shareholder in Embark with a 26% stake. BlackRock also held a minority stake, as did FNZ. Insurance company Scottish Widows, which is part of the Lloyds group plans to leverage Embark’s platform and product capability to digitise its retirement account and improve how it works with advisers, as part of the deal. The platform and pensions business, Embark, had been busy on the acquisition trail itself, having acquired Zurich’s investment and retail platform in 2020. Lloyds acquired Embark’s subsidiary brands, including its adviser platform. But the sale excluded the Rowanmoor Sipp and Small Self-Administered Scheme business, which was retained by existing shareholders. The banking giant said it will provide further investment and support to accelerate Embark’s proposition and “service innovations” for the intermediary sector. Late this year, Abrdn  confirmed media speculation that it was in discussions to acquire platform Interactive Investor (II). Within a matter of weeks it said it had bought II for a whopping £1.5bn , subject to regulatory approval. As part of the acquisition, II chief executive Richard Wilson will join Abrdn and continue to lead the platform, which will operate as a standalone business within Abrdn’s personal vector. Seeing as Standard Life Aberdeen’s rebrand to Abdrn attracted a great deal of attention due to it dropping the letter E from it’s name, people couldn’t resist a few puns about it purchasing a different vowel. And then there’s Praemium – not to be confused with Parmenion (which Abrdn sold to European private equity firm Preservation Capital Partners for £120m). The company intends to focus its attention on its home market and a strategic review prompted it to seek a buyer for its operations in the UK, Jersey, Dubai and Hong Kong. On 21 December Morningstar announced it intends to acquire wealth management platform provider Praemium’s UK and international business for £35m. I can’t wait to see what 2022 has in store for platforms. I’d hazard a guess at more deals! Katey Pigden is editor of Money Marketing. Contact her at: katey.pigden@moneymarketing.co.uk