Sydney – Diverger has acquired a 55% stake in Melbourne-based Paragem advice firm Atkinson Saynor Private Wealth using its transitional equity model.
Far from ‘owning’ practices, this transitional equity model is designed to support smaller advice practices looking to corporatise their business model, achieve scale, execute a succession plan or drive future growth.
This transaction follows Diverger’s first transitional equity investment in 2022 when it acquired a 35% equity interest in McGregor Wealth Management, a QLD based GPS Wealth practice looking for assistance in its next phase of growth.
According to Diverger CEO Nathan Jacobsen, this latest partnership is designed to assist the firm to transition the business to the next generation, whilst delivering a targeted return on invested capital for Diverger shareholders.
“These succession issues and obstacles to growth are a key challenge for many advice firms, but with an injection of capital, a tailored yet flexible equity model and a partnership with a like-minded partner, these can be overcome.”
Outgoing Principal Steve Atkinson, who has more than 40 years’ experience in the industry, said he was excited to see the business he has built, take the next step.
“We are pleased to partner with Diverger who we believe have developed a transitional equity arrangement that is flexible enough to be tailored to both the circumstances of our business and to our needs.”
Meanwhile David Saynor, an employed adviser who has worked in the business for 20 years and now becomes the Principal at Atkinson Saynor Private Wealth, said this was the start of the next chapter for the business. “it is exciting to be part of a thriving advice business with a concrete plan for the future and the ability to provide our clients with a generational advice model that can service more Australians moving forward.”
Diverger’s flexible transitional equity model operates with either a short or long-term partnership to provide the right level of support to an advice firm. If a business is looking for a short-term transformation opportunity and then to exit the shareholding, an agreement can be made to buy the shareholding back or to facilitate on-sell to successors. A long-term hold is also available if the investment is viable for both parties, the partnership is strong and there is agreement on the future growth plans.
“There are a lot of single shareholder practices in the $1-3 million range with significant growth ambitions but constrained by various factors,” said Jacobsen. “We talk to the Principal and map out a pathway to growth and then look at investing capital and resources to support that growth. We are passionate advocates for the future of advice to ensure its sustainability so Australians can access financial advice when they need to.”