Oaktree explores Ascot Lloyd sale advised by Houlihan Lokey

Pablo Mayo Cerqueiro and Amy-Jo Crowley
22 February 2022

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Oaktree Capital Management has appointed Houlihan Lokey to gauge interest in UK wealth manager Ascot Lloyd, four sources familiar with the situation said.

A formal sale process is slated to kick off towards or into the second half of the year, the sources said, with the asset likely to be marketed off EBITDA in excess of GBP 30m, two of them added.

Ascot Lloyd, which consolidates smaller independent financial advisors (IFAs) that help clients manage their savings, posted 24% YoY revenue growth to GBP 63m in 2020 and 20% growth in EBITDA to GBP 14.3m, as per its latest public accounts. Client assets stood at GBP 9.4bn at the end of the period.

The company has pursued a string of acquisitions since then and has seen healthy growth in its discretionary fund management arm, Avellemy, one source said.

Oaktree has been exposed to the asset for roughly a decade, first backing its predecessor Bellpenny and later combining it with Ascot Lloyd in 2017, keeping the latter's brand.

The sponsor previously engaged Houlihan Lokey in 2020 to explore a sale, two sources said, which ultimately led to Ares Management Corporation taking a minority stake in the business amid the COVID-19 pandemic. Ares has been lending to Ascot Lloyd since 2017.

The sale is likely to attract financial investors, such as private equity and pension funds, that can continue growing the company privately, three sources said, with one adding that it is probably still small for an IPO. It could also pique the interest of other wealth managers, one source added.

In contrast with continental Europe, where the distribution of investment products is normally dominated by financial institutions, the UK has a sizeable community of IFAs that are often small family-run operations. The space has seen an influx of private capital in recent years as sponsors look to consolidate via buy-and-build strategies.

Precedent transactions include Wren Sterling's Lightyear-backed MBO and Further Global Capital Management's acquisition of Progeny last year, two sources said. These have traded at mid-to-high-teens EBITDA multiples, one of them said.

Ascot Lloyd, Oaktree, Ares and Houlihan Lokey declined to comment.