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Honister: History repeats itself as past catches up with firm

Honister Capital launched in June 2009 from the remnants of The Money Portal.

Backed by Peter Simon, founder and owner of the retail group Monsoon Accessorize, and free of the bank debt that crippled TMP, the firm hoped to avoid a similar fate to the list of large failed firms which form part of its history.

In June 2009, Honister Capital acquired the principal advisory and direct businesses of The Money Portal Limited in a move that saw the rest of The Money Portal, including national IFA Bates, go into administration with debts of £55m.

Honister Capital paid £5.35m for TMP’s businesses, with the vast majority spent on execution-only arm Willis Owen and just £100,000 each paid for IFA arms Sage and Burns Anderson.

The Money Portal had acquired Willis Owen and national IFA Bates in 2003 and Berkley Berry Birch subsidiary Weston Financial Planning in March 2006 as BBB went into administration.

The firm took on Millfield Partnership Limited and the Sage Network in July 2006 for £10.5m, with the rest of Millfield placed into administration. Millfield had previously merged with Inter-Alliance in 2004.

Honister Capital continued to face problems from the past. In March 2011, it announced it had set aside £3m to cover the costs of a past business pension switching review and it is understood to be facing millions of pounds of other liabilities.

Although the group made an operating profit of £468,000 in the six months to March 31, 2011, the advisory businesses made a combined loss of £710,000 while Willis Owen made an operating profit of £1.18m. Willis Owen was spun into a separate company last October.

In the end, PI insurers were unwilling to offer cover, given the liabilities, leaving administration the only option.

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  1. Unless Honister also took over liability when acquiring these failed businesses (which is very unlikely), the current liabilities can only arise from business placed when Honister was in charge. Or am I missing something?

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