August 6, 2020 @ 16:38 by Alison Cowie
One of the UK’s largest Chartered financial planning firms has announced the acquisition of Berkshire-based Chiltern House.
The acquisition by North East-based full-service wealth management house, Fairstone, bolsters its unique proprietary Downstream Buy Out (DBO) acquisition model, which integrates IFA firms into the group, typically over a two-year period, prior to final acquisition.
Significantly, the majority of companies that have successfully reached the ultimate acquisition stage demonstrate continued organic growth and a higher valuation than expected on purchase, with firms acquired by Fairstone receiving on average a further 12 per cent above their expected sale value with some achieving as much as 39 per cent more.
Based in Bracknell, Berkshire, Chiltern House, which is a whole-of-market advice firm specialising in the management of investment and retirement portfolios, has achieved 18 per cent increase in profits and 8 per cent growth in revenue over the last year as part of the DBO acquisition programme.
The acquisition brings an additional 500 clients into the group together with Chiltern’s four advisers and seven support staff. The acquisition also secures gross fee income of £2.6 million for Fairstone together with funds under management of almost £400 million.
Commenting on the deal, Lee Hartley, CEO of Fairstone (pictured), said: “We are delighted to complete the final acquisition of Chiltern House, having worked closely with them throughout the integration phase.
“Their focus on quality advice and exceptional service is exactly what we are looking for in a business and their client-centric approach makes them an excellent fit for Fairstone.
“At Fairstone, we work hard to ensure our proposition gives firms the framework they need to significantly grow their businesses, without compromising on client service or independence, and Chiltern House has shared our appetite to grow and develop.
“Finalising this deal with Chiltern House marks a very valued addition to our group and continues our scheduled growth plan for 2020. We have every faith that with the team at Chiltern House, we have found long-term business partners who will play a key role in the next part of our journey.”
Chiltern House principal Keith Fisher added: “After 18 successful years in business and with retirement beckoning for two of the founding directors, we decided to join Fairstone to ensure the future success of the business and so that clients can continue to enjoy first-class service.
“Fairstone is a strong cultural fit for us, with professional people who care and put clients at the centre of what they do. As a business they understand where the value is for our clients and they work to ensure that we can spend as much time with them as possible.
“Our decision to become part of a leading and highly respected national Chartered firm secures not only the long-term interests of our clients, but also the team at Bracknell and we look to the future with every confidence.”
Seven firms have joined Fairstone’s unique DBO programme so far this year, bringing almost £1.2 billion in funds under management to the wider business. This brings total funds under management for Fairstone to close to £10 billion and funds under advice to almost £12 billion. Fairstone is also on track to announce a number of additional deals before the turn of the year.
Lee Hartley added: “Our unique DBO model is continuing to yield impressive results and is attracting a series of extremely high-quality firms into our fold. I am proud to say that Fairstone remains in a superb position to deliver continued growth and excellent client satisfaction throughout 2020 and beyond.”