Financial advisory business to raise £50m in AIM float

Financial advisory business Tatton Asset Management plans to raise more than £50m through an initial public offering on AIM next month.

Founded in 2007, Tatton Asset Management provides services to the FCA authorised financial adviser marketplace.

Based in Wilmslow, Cheshire, the business employs more than 4,000 advisers, with revenues of £11.9m in the year to 31st March 2017 and an operating profit of £5.5m.

The flotation is expected to value the company at £87.2m and marks a partial exit for the existing shareholders, as well as providing funding for future growth, with the institutional placings resulting in 63.5% of the company  being publicly held.

The company has conditionally raised £10m from an institutional placing of 6.4 million new ordinary shares at 156p a share, while a further £41.6m will go to the selling shareholders through the placing of 26.7 million shares.

Paul Hogarth, founder and chief executive of Tatton Asset Management, said: “The IPO of the Tatton Asset Management plc marks a very important and exciting milestone in the development of the group, allowing us to build our market profile further, reward our staff and other stakeholders, and provide access to the capital markets when needed in the future.”

The group operates through three specialist subsidiaries: Paradigm Mortgage Services (PMS), Tatton Capital and Paradigm Partners.

PMS is a mortgage distributor, providing mortgage and related support services to a membership of more than 1,000 IFAs. The company acts as an aggregator for its member firms, providing access to the majority of the UK’s banks’ and building societies’ mortgage products.

Tatton Capital launched its discretionary portfolio management service in early 2013, and has more than £4bn assets under management, growing at an average of more than £80m a month.

Paradigm Partners is the group’s independent financial services arm, providing support services, including compliance, to its IFA membership of more than 350.

A team at Zeus Capital, comprising director of corporate finance Dan Bate, co-heads of financial institutions Martin Green and Mike Cuthbert, chief executive John Goold and director of corporate finance Pippa Underwood, advised Tatton Asset Management on the transaction.

Bate said: “Through its three specialist advisory businesses, Tatton Asset Management has demonstrated the ability to achieve strong and consistent levels of growth, cornering a strong market share in all three divisions. This performance, as well as its low capital requirements, means it represents an attractive option to investors, who always value reliable and sustainable business models. We look forward to continuing our work with the existing shareholders as Tatton begins its life as a public company.”

Tatton Asset Management plc will be formally admitted to the London Stock Exchange on July 6.