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Embark begins float prep as platform IPO activity heats up

Chief executive of Sipp and platform provider Embark Phil Smith has said the company is beginning its preparations for a stock market float describing the move as ‘a natural part of the firm’s evolution’.

Embark begins float prep as platform IPO activity heats up

Chief executive of Sipp and platform provider Embark Phil Smith has said the company is beginning its preparations for a stock market float describing the move as ‘a natural part of the [firm’s] evolution’.

Embark, which launched an investment platform with FNZ last year, also has a growing Sipp book following acquisitions of Rowanmoor and Charles Stanley’s Sipp book EBS Management in 2017.

Smith (pictured) has in the past hinted at a float, but speaking with New Model Adviser® he said an initial public offering (IPO) is what he is focsued on in order to reward shareholders.

‘It is largely about the troops who have been building Embark with me,’ he said. ‘At some point you need to put a currency on your company… and it is a natural part of the evolution.’

He added however that the firm is not under pressure to list and nor does it have a fixed date for when it will happen.

‘Do we have ideas for what we would do with a raise? Yes. Do we need it? No. We are continuing to do all the preparatory things to be market ready as we have been since day one. We are stepping that up a little bit and our annual reports will be increasingly more sophisticated. But we are not working to a hard deadline.’

Smith’s comments follow fellow wrap platform Transact which last week listed on the London Stock Exchange giving it an initial valuation of £650 million. It also comes as Nucleus and AJ Bell are preparing for a listing, according to Sky News.

Smith said the Transact float was a confirmation of the strategy which he committed Embark to since it was formed in 2013 but it has not ‘accelerated’ any of his own IPO plans.

‘We had a very clear view that there is undiscovered value to be had in creating a hybrid between a pensions and wrap business and valuations have proved that. What I have seen with Transact makes me go “yes I was right”. So it is a reaffirmation to me.’

No more deals?

In recent years Embark has been one of the most acquisitive players in the Sipp market, but Smith said the market does not have any attractive opportunities left for him. 

‘We do get approached and there are certainly Sipp providers looking to sell but there is nothing in the Sipp space that meets our criteria that I am interested in or are looking to chase,’ he said.

‘I am happy that we are at critical mass and growing organically as fast as anyone in the market and we are not going to add books for the sake of it. Anyone above £2 billion [in assets] at the right price is interesting, as long as the book is not toxic, but there are not many of those guys left so I don’t see us acquiring in that space.’

For the firm’s investment platform, which is a ‘low-cost’ proposition targeting clients with between £25,000 to £150,000 in assets, Smith said he is ‘comfortable’ with sales so far and said ‘everything is ticking along as expected’.

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