One of Hargreaves Lansdown’s biggest shareholders has amassed a £100m war chest to invest in retail financial services firms across the protection, at-retirement and alternative investment markets.
Adam Norris, who set up Hargreaves’ pension and annuities arm Pensions Direct, is looking to take a stake of between 25 and 30 per cent in advice firms and specialist providers.
Individual investments will be made via Norris’ venture capital firm Horatio Investments, and will typically be between £1m and £5m.
He is expecting to have invested up to £20m by the end of the year.
Norris says: “I will not be buying traditional IFA businesses. There is an opportunity with more complex investments as while they add to people’s portfolios, most advisers walk away from products like venture capital trusts and enterprise investment schemes. I think there is a hole in the market there.”
Joining the venture are former Jelf Private Clients managing director Martin Bowles, and Nic Nicolaou, who helped develop Hargreaves Lansdown’s corporate pensions and IFA advisory team.
Cazalet Consulting founder Ned Cazalet says: “There is a shake-up taking place in retail financial services, and the shaking is only going to get more violent. Players like Hargreaves Lansdown, the life companies trying to deal with their back book, and potentially big brands like Google and Amazon are all looking at how to cater to retail financial customers, so it does not surprise me that people like Adam Norris are looking for opportunities given the dislocation in the market right now.”
Lansons director of regulatory consulting Richard Hobbs says: “The jury is still out on the full impact of the RDR, and if I was investing in this space I would want to ensure I was not putting in capital to replace lost revenue.”
Yellowtail Financial Planning managing director Dennis Hall says: “It is all very well having an acquisition war chest, but the question is whether Norris can find the right opportunities. Hargreaves Lansdown has certainly shaken up its part of the market, and has made a lot of money doing it. If he can bring any of that sparkle to the sector, I am sure he will be welcomed.”
See page 19 for our full interview with Adam Norris