Bain Capital, Brookfield and CC Capital all received access to limited due diligence after lodging matching bids for Insignia over the last few weeks.
Speaking on Thursday, following the firm’s ASX filing of its first half results, Insignia Financial’s chief executive, Scott Hartley, said due diligence processes have been completed and the firm has fielded additional questions from each of the three bidders.
“We are now awaiting their reconsideration of the offer,” Hartley said.
“There is no timeline on that, that’s in their hands now. We would like to see the process be expedited, but I would say we are close to done with the first phase of due diligence.”
Hartley clarified that Insignia does not have a strict deadline for revised bids and hinted that more than one private equity player could progress to the next round.
“We are not drawing a line in the sand. We have provided limited information to all three bidders to help them improve their offer, and if the bids are improved, then we will consider a second phase of detailed due diligence,” he said.
In its half-year results presentation, Insignia announced a statutory net loss after tax of $17 million, an improvement from a loss of $50 million in the prior corresponding period thanks to cost optimisation measures.
Average funds under management and administration increased by $25 billion to $320 billion, an increase of 8.6 per cent, while net revenue edged up 1.5 per cent driven by strong markets.
Insignia’s optimisation program delivered net cost reductions of $36 million on the prior corresponding period and is on track to deliver full year savings of $60–65 million ahead of schedule.
In its advice division, advice net revenue increased 4.4 per cent on the first half of FY2023–24 to $78 million thanks to strong new client growth and higher asset-based fee income. Adviser numbers stabilised at 200 – down from 211 – post planned optimisation and natural attrition, it said.
In asset management, net revenue increased by 6.2 per cent from $105.4 million to $111.9 million due to an increase in private equity and alternatives performance fees and market growth, partially offset by the divestment of the IOOF bond business.
Net flows rebounded from outflows of $1.8 billion to inflows of $2.1 billion thanks to growth in its MLC managed account solution and a large institutional mandate win.
Commenting on the results, Hartley said: “It’s pleasing to report a 30 per cent increase in our underlying net profit after tax to $124 million which has been driven by market growth and a continued reduction in operating expenses as we see the benefits of our optimisation program.
“We remain on track to achieve our strategic priorities for the second half of FY25, including meeting our operating cost reduction target, preparing for the Master Trust servicing transition to SS&C and refreshing the MLC brand to launch in market in 1H26.”
The firm’s dividend remains paused “to maintain balance sheet flexibility and fund initiatives that deliver long-term value”.
