Standard Life Aberdeen’s sale of Parmenion has come as little surprise to platform experts, who say it competed with the group’s other businesses that target IFAs: Wrap and Elevate,
SLA confirmed on Monday it is exploring the potential sale of Parmenion as chief executive Stephen Bird (pictured) seeks to take out “cost and complexity” from the business.
The sale, first reported by Sky News, could be announced to the London Stock Exchange as soon as Monday and is expected to be handled by Fenchurch Advisory Partners, a subsidiary of French investment bank Natixis.
Parmenion, which is owned by Aberdeen Standard Investments, the asset management arm of SLA, has more than £6.5bn under management split across more than 1,500 adviser firms, according to its website. It was acquired by Aberdeen Asset Management in 2016 under then chief executive Martin Gilbert.
‘Take out cost and complexity, and reconfigure our business’
In a statement, Bird said: “Since my appointment in September, I have been intensely focused on how we develop our strategy, take out cost and complexity, and reconfigure our business around our key growth vectors – our investments, adviser and direct to customer businesses.”
He described Parmenion as a “fantastic and highly regarded” business, but added: “We need to simplify our offering to financial advisers.”
“We will focus on our two adviser platforms, Wrap and Elevate, which operate on the same core technology. In the coming months we will be simplifying our model by merging their underlying technology, while retaining differentiated propositions for advisers.”
Parmenion competes with SLA’s other offerings and is too niche
CWC Research managing director Clive Waller praised the Parmenion business as “a gem” that offers something quite different and excels at what it does. “It’s users love the platform,” he added, but he said it was clear that SLA doesn’t need a platform that competes with its other main offerings.
Fundscape chief executive Bella Caridade-Ferreira said it was no surprise that Parmenion is up for sale because it wasn’t a natural fit with the bigger Standard Life business, as it’s too niche.
Private equity or another asset manager?
In terms of what type of firm could snap up the platform, Waller said the sector is attractive to acquisitors, partly because there are few sectors that offer decent prospects of profit, so private equity will take notice.
“I hope another platform doesn’t bid,” he said. “Parmenion won’t fit with a different proposition. An asset manager might, albeit I don’t see the attraction for such a move. I don’t really see what M&G gains from Ascentric. Parmenion won’t work if you are looking for vertical integration.”
See also: Ascentric deal set to help M&G play catch up in the advised space
Caridade-Ferreira said it could find a home with a large asset manager or a discretionary fund manager.
She said: “It’s a DFM on a platform so this would be a good fit for a large fund manager which will give it an inroad into the DFM world and also the platform world in one go. DFMs might also be interested as a means of differentiating their proposition.”
See also: Ascentric boss exits two months after M&G takeover
The move is part of a wider cost-cutting exercise by Bird who joined SLA as CEO in the autumn. Earlier this month, he said asset manager is looking at opportunities for cost savings in the Wrap and Elevate platforms and to target growth in the UK wealth management and ETFs space.
See also: Aberdeen Standard continues passive push with hedge fund trackers
