Advice firm consolidator AFH has passed £4.5bn in funds under management after a record 16 acquisitions over the last twelve months.
In a trading update this morning, AFH said that for the 12 months to 31 October, revenue is expected to come in at £50m, up 49 per cent from £33.6m in 2017. This compares to an anticipated £34m spent on the acquisitions. The firm had £22m in cash as at 31 October after raising £17.5m in December 2017 and £15m this October from institutional investors.
The increase in revenue came both from the integration of acquired firms, and improvements in the average revenue brought in by existing advisers, the firm says.
Funds under management showed an increase of £1.7bn over the period.
The update reads: “AFH is well positioned to continue to take advantage of ongoing IFA market consolidation.”
AFH says thatwhen it expects to hit £50m in revenue in its full year results, the majority, £30m, will come from acquisitions, and £20m generated organically as new business.
When AFH acquires a firm, it normally pays an upfront fee, with further pay-outs later based on performance.
It says this morning that it is paying out on average above 90 per cent of the price negotiated.
AFH chief executive Alan Hudson says: “I believe that shared values are critical in creating successful acquisitions that bind both advisers and clients to the AFH group and am pleased at the high level of advisers who remain with AFH many years after their earn out has been completed.”