Permira Considers Sale of £1.5bn Stake in Evelyn Partners

Private equity firm Permira is exploring the sale of its £1.5bn majority stake in Evelyn Partners, signaling potential market shifts.

In a significant development within the financial services sector, Permira, a prominent private equity firm, is reportedly seeking to divest its majority stake in Evelyn Partners, valued at approximately £1.5 billion. This move comes as Permira, which currently holds about 56% of the company, contemplates various strategic options, including the possibility of a breakup that would see Evelyn’s accountancy division separated from its investment services.

Permira's journey with Evelyn Partners began in 2014, when it acquired a stake in what was then known as Bestinvest, an online investment platform. This acquisition was pivotal, as it led to the merger of Bestinvest with its competitor, Tilney. The landscape of Evelyn Partners further evolved in 2020 when Warburg Pincus, another key player in the private equity arena, joined as an investor. This partnership provided essential capital that facilitated the merger between Tilney and the accountancy firm Smith & Williamson.

The culmination of these strategic mergers and acquisitions was realized in 2022, when the Tilney and Smith & Williamson brands were unified under the new name, Evelyn Partners. This rebranding marked a significant milestone in the company’s evolution, positioning it as a comprehensive financial services provider.

Evelyn Partners has demonstrated robust growth in its assets under management and administration (AUMA), which reached a record high of £61.8 billion in the first quarter of the current year. This figure represents a 4.6% increase from the previous quarter, where AUMA stood at £59.1 billion. Moreover, the company has experienced a remarkable 13.6% growth compared to the same period in 2023. The surge in AUMA can be attributed to several positive factors, including a notable increase in gross inflows.

In its trading update released on May 14, Evelyn Partners reported that gross inflows for the first quarter totaled £1.8 billion, reflecting a 5.9% increase over the final quarter of 2023. This upward trend in inflows underscores the firm’s strong market position and the confidence investors have in its services.

As Permira considers its options regarding the sale of its stake in Evelyn Partners, the financial community is closely monitoring the situation. The potential breakup of the firm could lead to significant changes in the competitive landscape of the financial services industry. Analysts speculate that separating the accountancy business from the investment services could unlock additional value for stakeholders and create more focused operational strategies for each entity.

The implications of this potential sale extend beyond just Permira and Evelyn Partners. It highlights the ongoing trend of consolidation and restructuring within the financial services sector, as firms seek to adapt to changing market conditions and investor demands. The move also reflects a broader shift in private equity strategies, where firms are increasingly looking to optimize their portfolios and maximize returns for their investors.

The exploration of a sale by Permira of its majority stake in Evelyn Partners signals a pivotal moment for both the private equity firm and the financial services provider. As the market awaits further developments, the potential for a breakup and the subsequent impact on the industry remains a topic of keen interest. The financial community will be watching closely to see how this situation unfolds and what it means for the future of Evelyn Partners and its stakeholders.