There has been a significant amount of M&A in the platform market of late, in the UK and Continental Europe, across D2C and intermediaries. Here we take a quick look at just a few of the deals we’ve seen over the past year, starting in the UK.

FNZ gobbles up GBST and JHC

FNZ announced it was acquiring both GBST and JHC in July 2019. The GBST deal is currently being investigated by the UK Competition and Markets Authority, given the already strong position of FNZ in the UK platform technology market.

The current market share of FNZ depends significantly on the definition of ‘platform’. The FCA’s definition restricts the market to retail services that provide access to products of multiple asset managers, which feels a little restrictive when looking at platform technology – FNZ is also a significant provider of closed architecture propositions, such as the Vanguard Investor UK D2C service.

Interactive Investor continues its shopping spree with The Share Centre

Just last week it was announced that Interactive Investor was acquiring The Share Centre. This follows its previous acquisitions of TD Direct Investing and Alliance Trust Savings.

The branding of the new entity is up for debate. Interactive Investor has grown quickly by acquisition over a relatively short time span. Its brand hasn’t kept pace with its scale, as measured by customer numbers or assets. It’s the second largest UK direct platform, but its brand awareness is relatively low, at only 16% (in our UK Consumer Insights research). This compares to 26% for The Share Centre. Share plc’s recommendation of the offer stated that “ii intends that ‘Share’ will become the senior brand for the combined business unless after professional review there are compelling marketing reasons to the contrary.”

The Share Centre brings a number of elements currently absent from Interactive Investor’s offering, including a Lifetime ISA and a fund of funds business.

Embark marches towards scale with acquisitions

Embark is relatively new to the UK adviser platform market, but has grown significantly in a short space of time. This has largely been fuelled by the acquisitions of Alliance Trust Savings’ advised book and the Zurich Intermediary Platform – the latter only receiving regulatory approval this week.

These acquisitions now mean Embark will be responsible for roughly £23bn of client assets on its platforms. In terms of assets, it’s now up there with some pretty well-established players.

Anacap has aspirations for Wealthtime

In the UK, private equity firm Anacap has acquired adviser platform, Wealthtime. While a minnow in the adviser platform world, it has some big aspirations, which the new owners should help turn into a reality.

The platform has great user reviews, is profitable and operates on its own technology – all factors which have contributed to Transact’s success. The platform will need to build scale without impacting its high service levels.

Allfunds show its ambition with BNP Paribas and Credit Suisse deals

2019 saw Allfunds announce deals with Credit Suisse and BNP Paribas in quick succession. Both firms take stakes in the platform. BNP gives Allfunds a major foothold in France. It also adds BNP’s Italian banca corrispondente business.

Allfunds is now a European platform behemoth, with significant share of the institutional platform market across most of the Continent. It is currently renegotiating distribution agreements with asset managers in light of its increased distribution potential.

Private equity backer Hellman & Friedman and GIC may soon be looking towards the exit. The platform is in a strong position, with big distributors on board and further non-European expansion in progress.

Clearstream establishes pan-European presence with UBS Fondcenter deal

Finally, Clearstream’s acquisition of UBS Fondcenter creates another major pan-European platform player. It will be looking to increase the number of third-party distributors on the platform, which is currently heavily skewed towards UBS Global Wealth Management.

UBS has retained a minority stake in the platform, with the potential for Clearstream to increase its holding further down the line.

We’re expecting this consolidation to continue. There are still pockets of sub-scale and non-core business out there that are ripe for acquisition. And there’s lots of interest out there – we’ve seen some very ‘healthy’ valuations!