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Goldman Sachs takes stake in Nutmeg

Goldman Sachs is to take a stake in robo-adviser Nutmeg as part of a £45 million funding round

Goldman Sachs takes stake in Nutmeg

Goldman Sachs has taken a stake in robo-adviser Nutmeg as part of a £45 million funding round.

The Wall Street giant's Principal Strategic Investments (PSI) group is one of the largest among a group of investors taking part in the latest round of funding. Goldmans' contribution has helped make it the largest ever fundraise by a digital wealth manager in Europe.

Hong Kong's largest independent financial advice firm, Convoy, is also investing further in Nutmeg following its initial backing of the robo-adviser just over two years ago. 

This comes as part of an enhanced strategic partnership between the two firms ahead of expansion in Asia. 

The fundraising will place Nutmeg's value at £245 million, and is subject to approval by the Financial Conduct Authority (FCA). 

Nutmeg chief executive Martin Stead said: 'This is a vote of confidence in our team, investment proposition and track record, and marks Nutmeg’s transition from start-up to scale-up.

'We look forward to Goldman Sachs' support and to exploring commercial collaboration opportunities that further accelerate our growth plans.

'This funding also enables us to expand internationally, with our plug-and-play B2B expansion model, which leverages both our technology and investment capabilities, developed in this highly respected FCA-regulated market. We plan to launch with existing partners Convoy in Hong Kong this year.'  

The move signals further intent for Goldman to muscle into the UK retail sector, after the UK launch of retail bank Marcus in August 2018. 

Goldman Sachs partner and incoming Nutmeg board member, Rana Yared, said: 'Nutmeg has already established itself as one of the fastest growing wealth managers in the UK. We are excited to fuel further growth and innovation through our investment and to support management in their vision of leveraging technology to broaden access to world-class investment solutions.'

Nutmeg began piloting its financial advice service in October 2018, offering clients a one-on-one review with an adviser free of charge, with subsequent tailored advice and personal recommendations for £350 plus VAT. 

Nutmeg's head of financial advice, Lisa Caplan, told New Model Adviser® sister publication Wealth Manager® at the time the firm was leveraging technology to give people 'the freedom to do it at a time that suits them, at a fraction of the cost they'd face from an IFA'. 

The firm has thus far attracted a total of £116 million in investment since launch from a range of angel, financial and strategic investors worldwide.

Listen to our podcast with Nutmeg chief investment officer Shaun Port here.

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