IFA-backed funds platform Nucleus prepares £100m float

2 March 2018, 11:08

A funds platform which counts hundreds of independent financial advisers among its shareholders is laying a path towards a London flotation that could value it at upwards of £100m.

Sky News has learnt that Nucleus Financial, which is based in Edinburgh and has more than £13bn of assets under administration, has appointed the broker Shore Capital to oversee a listing.

Sources said the float, which could happen as soon as the next three months, was unlikely to involve Nucleus selling new shares, but would allow it to provide liquidity to its army of shareholders.

Nucleus's "wrap platform" enables its clients - several thousand independent financial advisers (IFAs) - to offer their customers access to investments including ISAs and pensions from a single place.

The company, based in Edinburgh, has considered an IPO previously, but is said to have decided that the payment of its maiden dividend last summer was a logical milestone to begin formal preparations to go public.

A big stake in Nucleus is owned by Sanlam, the international financial services group.

Announcing the dividend distribution in August, David Ferguson, Nucleus' founder and chief executive, said: "Following five consecutive years of increasing revenues and profitability that has seen the business become debt free with over £15m in cash reserves, Nucleus is better positioned than ever before to take advantage of the significant growth opportunities in the platform sector."

A listing will make Nucleus the latest in a string of independent funds platforms to turn to the public markets amid growing demand for advice from investors.

Nucleus declined to comment on its float plans.

Sky News revealed last month that AJ Bell, which oversees assets worth nearly £40bn, held a beauty parade of investment bankers to prepare for an IPO.

AJ Bell, which is named after its founder and ‎chief executive, Andy Bell, is unlikely to go public until the final quarter of this year at the earliest, according to insiders.

When it does so, it will turn Mr Bell into one of the stockbroking sector's wealthiest ‎entrepreneurs, as well as yielding windfalls for some of the City's leading fund managers.

Mr Bell owns 28% of the company, which is expected to be worth several hundred million pounds after it floats.

Woodford Investment Management, the firm headed by prominent fund manager Neil Woodford, ‎holds an 8% stake, while Invesco Perpetual is the biggest shareholder with 37%.