Cairngorm Capital Partners has acquired Munnypot and Whitefoord in order to launch financial advice and investment management group Verso Wealth Management.
The deals are expected to complete shortly, subject to regulatory approval, and mark the Edinburgh and London-based private equity firm's entry into the wealthtech sector.
Established in 2015, Munnypot provides an online investment service which supports product selection and automates client servicing.
Meanwhile, Whitefoord combines discretionary investment management services and financial advice to provide private clients, trusts and pension funds with a comprehensive wealth management service. Founded in 2000, it offers bespoke portfolios for self-invested personal pensions, ISAs and trusts.
Cairngorm Capital is partnering with a management team led by Andrew Fay and Simon Redgrove, who will lead the Verso Group as chief executive and managing director respectively.
Fay and Redgrove co-founded Cavanagh Group, an AIM-listed financial advisory firm that was acquired by Close Brothers in 2011. They led Close Brothers’ wealth management division until the founding of Munnypot in 2015.
Whitefoord chief executive Vince Whitefoord will also join Verso’s executive team, leading its discretionary investment management business.
Warren Gee, Cairngorm Capital’s chief portfolio officer, joins Verso’s board as a non-executive director, bringing experience of delivering rapid growth within the investment platforms sector, gained from his involvement with FNZ, where he was previously UK chief executive.
Whitefoord is the cornerstone of a series of planned investments within the investment management and financial advice space and Verso is in "advanced negotiations" with a number of bolt-on targets.
Verso’s approach will blend the expertise of its client advisors and investment professionals with an automated advice capability, to provide a high quality and cost effective service to existing and new customers, tailored to their individual circumstances and requirements.
The model should support a broader spectrum of customers, including the sizeable segment of the population that has been underserved to date, such as small savers and new investors.
For advisors, the technology proposition is aimed at alleviating many of the regulatory and operational challenges, allowing them to spend more time focused on their clients.
This is Cairngorm Capital’s 35th proprietary investment since 2016 and the fifth for its third fund, which is scheduled to close later this summer.
The latest investment was led by Neil McGill and Lucy Graham.
McGill explained: “Our firm believes that the parallel trends of the increased complexity of consumers’ advice needs, their growing adoption of digital services and rising automation in wealth management will endure over the long term.”
Andrew Fay, Verso’s chief executive, said: “Verso will make it far easier for advisors to maximise efficiency, reduce compliance risk and increase revenue.
“Our goal is to become the leading digitally driven IFA consolidator and there’s no limit to our ambition - we would invite any IFA firm that is interested in learning more, to contact us.”
Whitefoord added: “Partnering with Verso is an obvious choice for us and the natural evolution for our firm.
“Our clients greatly value our personal service, and that will remain unchanged, but a wholly automated advice and investment option will allow us to help their families and open up our expertise to a far wider audience.”
Cairngorm Capital was advised on this transaction by Thistle Initiatives and Burness Paull.
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