Buchanan Capital has increased its equity stake in Black Swan Capital, a London based wealth manager with approximately GBP480m of private client assets under advice (AUA).
Buchanan Capital’s stake now represents 7.5% of the voting rights in the company, and has stated its intention to increase this position over time. This latest transaction values Black Swan Capital at GBP4.029m, which equates to 84bps of AUA.
James Hughes, CEO of Buchanan Capital, explained, “Black Swan Capital has built its book primarily through acquisition and absorption of exiting financial advisers. They’re only just getting their teeth into the integration and optimisation phases of the process, hence the relatively low AUA based valuation. The process could take several years, but the upside potential is worth working for. A book that size should eventually yield at least double the revenue, and a large part of that should go to the bottom line. The processing and administrative capacity is already there. It’s now just a matter of methodically tackling the client bank over the next few years to realise the business’s full potential. Valuation should grow rapidly, as the hard part – client acquisition – is already done.”
Paul Hutton, co-founder and CEO of Black Swan Capital, commented, “We’re pleased to have Buchanan Capital on board as shareholders. James Hughes is actually one of the original founders of Black Swan Capital, so he’s especially familiar with our business and the industry. He’s recently joined the board as a non-exec, and we’re confident that he and his business partners at Buchanan Capital will make a material contribution to our business. They’re very knowledgeable and professional, and we’re looking forward to working with them.”