AFH Financial has raised £1.9m from investors through an unsecured loan note issue which it plans to use to fund acquisitions of small and medium-sized advice businesses in new locations.
In November, the West Midlands-based consolidator published its 2015 business plan, revealing the firm’s ambition to expand into London and South-east.
The loan notes pay lenders 7.5 per cent a year and have a redemption date of 12 December 2018. On redemption, noteholders will be able to purchase 200 new ordinary shares, at £2 a share, for every £1,000 of notes subscribed for.
AFH Financial chief executive officer Alan Hudson says: “The funds will be utilised to accelerate AFH’s stated strategy of acquisitive growth. Selective acquisitions include both small and medium sized IFA businesses that are located outside of AFH’s traditional core geographical locations and seeking the benefits of being part of a larger organisation.
“With increasing funds under management AFH remains well-placed on becoming a leading UK financial planning-led wealth manager.
“Our ability to raise additional funding through the issue of these notes will facilitate the board’s ability to enhance earnings attributable to shareholders from future acquisitions whilst maintaining gearing, all of which is unsecured, at a conservative level.”