Permira picks up 3i's Bestinvest

Alice Murray
07 November 2013

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Listed-firm 3i has sold UK wealth manager Bestinvest to Permira.

The deal value has not been disclosed, though in a statement 3i said the transaction generated total proceeds of £45m for the vendor.

According to Permira, the UK wealth management industry has seen assets increase by more than 10% annually in recent years. The private equity house believes that despite recent consolidation, the market remains fragmented with a large number of smaller firms with under £3bn of client assets.

Following the transaction, Permira will support Bestinvest's expansion plans through add-on acquisitions.

Bestinvest is also set to benefit from the results of the recent Retail Distribution Review, which has replaced commission-based advice in the UK with transparent fees. This has meant banks have withdrawn from the advice market, giving Bestinvest the opportunity to acquire new clients through its online investment service.

Previous investment
3i acquired Bestinvest in July 2007, and in 2010 supported the company's acquisition of Haines Watts Financial Services.

In May 2009, 3i reduced its stake in the company by £47m. During the investment period, 3i introduced Mike Covell as chairman and Peter Hall as CEO.

Under 3i's stewardship, Bestinvest's funds under management have grown from £3.7bn to around £5bn.

Company
Established in 1986, Bestinvest is a private client investment adviser, with assets under management worth £5bn. The company provides a range of products including an online investment service for self-directed investors, investment advisory and investment management services.

Bestinvest is headquartered in Mayfair, London, and employs more than 200 people.

People
Ian Lobley is a partner at 3i. Philip Muelder is partner at Permira. Peter Hall is CEO of Bestinvest and Mike Covell is chairman.

Advisers
Vendor – Evercore (Corporate finance); Macfarlanes (Legal).
Equity – Fenchurch Advisory Partners (Corporate finance); Freshfields Bruckhaus Deringer (Legal).
Management – Jamieson Corporate Finance (Corporate finance); DLA Piper (Legal).