New owner for Nucleus months after being sold

Private equity investment firm HPS Investment Partners has purchased a majority stake in adviser platform Nucleus for an undisclosed sum.

The move comes less than a year after Nucleus was sold to Epiris-owned rival platform James Hay for £145m in an all-cash deal.

Private-equity firm Epris will retain a “significant minority stake” in Nucleus.

Epris said over £5m has been invested in service and £6m in platform development since it acquired Nucleus last year.

HPS was founded in 2007 with a remit to focus on credit and less liquid investment opportunities. It was originally a division of Highbridge Capital Management, part of JP Morgan Asset Management, and known as Highbridge Principal Strategies. In March 2016, the principals and employees of HPS acquired the firm from Highbridge and JP Morgan.

A number of private equity and investment firms were reported to be interested in taking a large stake in Nucleus, including Goldman Sachs.

Richard Rowney, CEO of Nucleus, said the deal would not result in any immediate changes for the platform or its clients.

He said: “While today’s news will not result in any immediate practical change, it is certainly a vote of confidence, not just in our strategy, but also in our people – the 650 dedicated colleagues who make up our business, with a sole focus of supporting advisers, and helping them make retirement more rewarding for their clients.

“We’ll now continue our important work of ensuring the basics of platform provision are right; serving advisers properly, executing orders on behalf of their clients and ensuring the financial plans they’ve designed can be effectively delivered. At the same time we’ll continue to share the benefits that come from economies of scale with our customers, investing in giving them better products, better service and better prices.”

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Mark Polson, principal of platform consultancy the lang cat, said he thinks there is the potential for Nucleus to acquire another adviser platform in the future.

He said: “Operationally, so far as I can see, the strategy of rehabilitating James Hay with a move to a new platform, with Nucleus continuing to run in a steady state for now, is unchanged.

“But behind the scenes I think there are two interesting things here: firstly, the combined group is a big business now – perhaps the 5th biggest intermediated platform business in the UK – and so having more firepower on the shareholder register is probably a good thing.

“Secondly, the group is clearly going for scale, and that likely means it will want to take advantage of any potential further acquisitions out there in the years to come. Again, having another, larger shareholder might help with that.”

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