Wealth platform to realise True Potential with £2bn sale

A wealth management platform used by more than one-fifth of Britain's army of independent financial advisers (IFAs) is plotting a sale that could value it at close to £2bn.

Sky News has learnt that True Potential, which is based in Newcastle, has appointed bankers from Perella Weinberg Partners to field offers from potential buyers in the coming months.

The appointment of Perella Weinberg makes True Potential the latest in a string of British financial technology businesses to seek valuations of at least $1bn - crystallising their status as so-called 'unicorn' companies.

True Potential was set up in 2007, and is owned by 739 individual partners, with a minority stake also held by FTV Capital, a US-based private equity firm.

The company is controlled by its founder, David Harrison, who remains at the helm and owns a paper stake likely to be worth hundreds of millions of pounds.

Mr Harrison previously founded Positive Solutions, which grew into a business representing 1900 IFAs.

True Potential is vertically integrated, meaning it has its own platform and funds, as well as serving 1.4m end clients through thousands of IFAs.

Last year, the company reported turnover of £99m and profits of £24m, up 61% on the previous year.

In total, True Potential has more than £52bn of client assets under administration.

While the company's revenue and profit growth is also expected to be robust this year, a £2bn valuation would nevertheless represent a vast multiple of earnings, underlining the lofty price tags attached to fintech-related assets as consumer behaviour increasingly shifts to digital platforms.

In a statement issued in response to an enquiry from Sky News, a True Potential spokesman said: "2017 was an exceptionally strong year for True Potential and that performance has accelerated throughout 2018, in an industry that is also growing fast.

" It is inevitable that there would be interest in the company.

"True Potential has appointed Perella Weinberg Partners to consider and advise on the domestic and international interest that has been shown in us."

Among other UK fintech companies exploring sale processes is FNZ Group, which provides technology platforms used by wealth management companies and counts Aviva, Barclays and HSBC among its customers.

A string of other wealth management technology providers have elected to go to the public markets to crystallise substantial valuations.