Financial advice network Fitzpatricks Group has received capital funding from two private equity investors, leading one analyst to tip further deal activity of this kind.
Yesterday, Fitzpatricks announced that it has entered into a capital funding partnership with Quadrant Private Equity and Yorkway Capital Partners.
Commenting on the deal, Forte Asset Solutions managing director Steve Prendeville told InvestorDaily that increased appetite from private equity investors is one of a number of factors driving M&A activity in the mid-tier dealer group market.
“I nominated 12 months ago we would witness significant consolidation and participation in mid-sized dealer groups,” Mr Prendeville said. “In the last few months we have seen Beacon Group merge with Libertas, Easton Investments Limited acquire GPS Wealth and now Fitzpatricks has attracted Australian private equity investment.
“What they all have in common is they are all quality groups who will be recipients of growth from adviser migration and in-house asset management. With growth comes the need for capital.”
The capital injection will help the licensee and its advisers reach more Australians for financial advice, said Fitzpatricks chief executive John McMurdo.
“Today’s news is exciting for our advisers, clients and our business partners as we secure the capital base and partners required to build a strong continuum of the Fitzpatrick’s renowned client-centric focus,” Mr McMurdo said.
“Achieving scale and realising the efficiencies and benefits it brings for clients is a central challenge for all professional services providers, particularly those who seek to remain outside of institutional ownership. We welcome into the partnership Quadrant and Yorkway, who identify strongly with our vision and the opportunity for Fitzpatricks.”
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