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Five providers take stake to boost Millfield&#39s deals

The dash for distribution moved into top gear this week as five of the most acquisitive product providers joined forces with other investors to buy an 18 per cent stake in Millfield, giving the IFA £17.2m to buy a further 15 firms.

Aegon, Friends Provident, Norwich Union, Scottish Widows and Skandia are paying £2.4m each for newly issued shares in Millfield, with a further £5.2m from other investors.

Millfield is also teaming up with Australian financial services provider AM Corporation in a £3.5m deal to set up a company to develop a portfolio management software tool. Lifetime Portfolio Management will offer IFAs software that gives wrap account services to advi-sers and customers.

The IFA group increased turnover by 86 per cent to £20.5m from £11m over the same period the previous year. The cash injection boosts Millfield&#39s market capitalisation to £95.8m. Net losses rose to £7.1m in the year to March from £0.3m the previous year.

Millfield wants to nearly double its RIs from the present 380 to 700 and says it is on course for its target of £140m turnover by 2006 by boosting per-RI turnover to £200,000.

It plans to absorb 15 more firms by stepped acquisition through its Millfield Associate Partnership by 2003.

None of the investing providers gets a seat on the board and the IFA says there is no obligation to buy quotas of their products. Millfield will have an IFA and a distributor arm if the market is depolarised.

Millfield group chief executive Paul Tebbutt says: “We are delighted to have achieved support from quality product providers.”

Friends Provident managing director Ben Gunn says: “We want the IFA sector to continue to be healthy. We are not into taking majority stakes. There are clearly some providers with similar ideas about the way the market is going to develop.”

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