Talks between national advice firm True Potential and suitors have failed to materialise into a formal offer, New Model Adviser® can reveal, as discussions with two interested parties have ended.
Last September, True Potential announced it had appointed Perella Weinberg Partners to ‘consider and advise on the domestic and international interest that has been shown in us’. The company was seeking a valuation of between £1 billion and £2 billion from any potential bidders.
Following this, New Model Adviser® revealed last November that US private equity house KKR was one of two parties in talks to acquire a stake in the Newcastle-upon-Tyne-headquartered advice group.
However, New Model Adviser® understands these talks between KKR and the other firm have now ended. It is understood, although the pair of suitors were in the second round of the process, no formal offer was made. The two parties could still return to the table at a later date.
KKR declined to comment.
New Model Adviser® also understands multiple other firms have expressed an interest in the business.
True Potential’s process of ‘considering our options’ will continue throughout the year, the firm said.
‘As we confirmed in September, True Potential appointed Perella Weinberg Partners to consider our options and, following a strong start to 2019, that process continues,’ a True Potential spokesman said.
A person familiar with the situation told New Model Adviser® the talks ended because of different views on what the valuation of the business should be.
True Potential is seeking a valuation of between £1 billion and £2 billion. This is based on predictions it will double its profits to £50 million in 2018, increase its use of in-house funds and develop its own platform technology, an information memorandum for investors outlined last year.
As of 2017, the firm had 481 restricted advisers within its national advice business, True Potential Wealth Management, and 666 independent advisers using its compliance and technology network True Potential Adviser Services.
The two largest shareholders in the firm are managing partner David Harrison (pictured), who according to Companies House documents owns 35% of shares, and US private equity firm FTV Capital, which owns 27%. The rest of the company is owned through its adviser partners.