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Jersey, Channel Islands based and registered holding company TEAM (TEAM:AIM) is engaged in wealth and asset management.

TEAM is a listed acquisition vehicle building a transformational and leading onshore and offshore wealth management business delivering increased shareholder value by creating a differentiated business of scale through the opportunities presented by the current market dynamics.

As a new business, material growth is achievable through opportunistic and nimble investments in suitable businesses, while the medium and longer-term growth expectations from the wider wealth and asset management market could provide sustained revenue growth for the group.

The management has proven sector successes, the infrastructure and funding support from existing shareholders including leading institutional investors. TEAM will be a consolidator in the highly fragmented broader wealth market.

TEAM is a scalable hub ready for expansion.

MANAGEMENT TEAM

The company was founded by experienced former investment banker, Mark Clubb. Clubb currently owns shares to the equivalent of 17.58%, having recently further added to his holding on two occasions and is executive chairman.

The company was admitted to the London Stock Exchange AIM market in March 2021 whilst also raising £7.8 million of new capital from a mixture of Institutional Investors such as Schroders Asset Management (9.58%) and Canaccord (7.9%), together with numerous experienced private individuals or their entities.

Ahead of the listing, Clubb was joined by Matthew Moore, as chief financial and operating officer. Moore has extensive experience and success within the industry including the advisory segment having fulfilled similar senior roles at Close Brothers and more latterly, Ascot Lloyd.

The remainder of the board are three high quality and experienced independent non executives. These being, Philip Taylor, formerly of PWC, Hawksford and Coutts Offshore; David Turnbull, formerly, Executive Committee member at Salomon International (Citigroup) and currently chairman of Fiduciary Settlements Ltd; and Michael Gray, formerly of RBS International and currently a non-executive director of Triton Investment Management Ltd, GCP Infrastructure Investments and Jersey based trust company, JTC.

The listing enabled new shareholders to invest, provide long term capital and an acquisition currency. Further it raised public awareness and enabled an incentivization mechanism for current and future senior management.

CONSOLIDATING THE SECTOR

As a consolidator, TEAM has identified the sector as having attractive long term secular growth in a currently fragmented market, both onshore and offshore.

Demographics is a key attraction enjoyed by the sector together with client “stickiness” and the focus on savings meaning earnings have been predictable and stable.

Times are changing, as observed by Clubb: ‘We are entering the largest inter-generational transfer of wealth ever seen. The European Central Bank approximates half of all wealth in Europe is currently controlled by people over the age of 55.

‘That’s more than £9 trillion. I would note that frequently, beneficiaries change advisor on inheriting.’

He added: ‘The next generation of wealthy are also emerging from new industries, principally in technology. They require a differentiated and personalized investment service aligned to their core values and expectations. The same holds true of those who are inheriting.’

Substantial increases in regulation means many smaller managers struggle with this environment. Against this, many larger companies have become cumbersome and bureaucratic with legacy operating and management systems and practices. Many businesses have not invested or taken advantage of available technology to modernise.

There is polarisation and as large players strive to improve profit margins through cost measures from their absolute scale, there is space for boutiques of scale to thrive.

There has been absolute growth of personal wealth, increased personal accountability for individuals’ financial futures; and the generational transfer of wealth through inheritance, which is challenging the existing incumbents business models and share of market.

PLENTY OF OPPORTUNITIES

There are many discretionary fund management companies, often founder owned and managed that are subscale and looking for the next step in their development. TEAM can provide that.

TEAM believes that unencumbered by the past and with a modern, fit for purpose approach there are many opportunities both organic and by acquisition to responsibly build a growing and profitable business by delivering cost and revenue synergies, and leveraging off an increasing scale and breadth of services. This could include ancillary complementary services such as specialist funds, cash management and corporate services.

TEAM is confident efficiencies and margin expansion are available but require disciplined management, effective regulatory compliance, increased use of technology and cost control.

TEAM’s sees opportunities in complementary locations within the Crown Dependencies and other offshore centers but also onshore (UK). The UK wealth management market is worth circa £2 trillion in assets under management.

TEAM has a pipeline of potential acquisition targets that range in size from £1 million to £60 million, both listed and private. It has an extensive deal origination network via its management and board, shareholders and advisors.

Further, its platform will be appealing in the recruitment of both individuals and teams.

OFFSHORE MARKET FOCUS

TEAM’s acquisition history has thus far been focused on the offshore market. It notes that Jersey alone accounts for some £600 billion of private wealth.

TEAM Asset Management was the first acquisition. The ‘lifestyle’ business had assets under management of £140 million (January, 2020). Since then AUM has grown to £286 million (31 March 2021) clearly demonstrating management ability to grow.

July this year, JCAP Treasury Services acquired, a leading Jersey based provider of cash management services, focused on improving the return and mitigating the risks associated with the management of cash for institutions, professional advisers, trustees and high net worth individuals with over £1.3 billion in assets under advice.

The total paid is up to £2.95 million or a price to earnings multiple of 7.9 times the 2020 earnings.

JCAP has clear synergistic revenue growth opportunities through providing cash management services to the TEAM client base.

Being a listed entity with the management team, transparency, corporate governance and access to future capital makes TEAM very well placed to succeed.

TEAM is building a new wealth, asset management and complementary financial services group.

DISCLAIMER: This article was written by TEAM Asset Management and published by Shares under a commercial agreement. It is not a recommendation to buy or sell the shares. The article originally appeared in SharesSpotlight report on 26 August 2021.

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Issue Date: 26 Aug 2021