Aim-listed IFA acquires 5% stake in Tavistock

Deal sees Lighthouse become the third largest shareholder in Tavistock

Tavistock Investments and Lighthouse have entered into a strategic agreement to set up an investment management service, which sees the latter picking up a major controlling stake in the former.

Lighthouse, one of the UK’s largest autonomous financial advisory and wealth management firms, paid £1m in cash to acquire roughly 30.5 million new ordinary shares worth 3.28p each in Tavistock as part of a recent fundraise.

A total of £1.25m was raised from a number of investors, with Lighthouse offering up the most cash. It now owns a 5.3% stake in Tavistock, making it the third largest shareholder in the business.

Tavistock CEO Brian Raven (pictured) remains the biggest shareholder, owning 11.1% of the firm, followed by Marlborough Investment Management chairman and managing director Andrew Staley who owns 9.73%, according to information on Tavistock’s website.

The partnership will see the pair working together to develop and distribute investment products under Lighthouse’s Luceo brand, including Tavistock’s recently launched capital protection portfolios, to clients of the Aim-listed IFA.

Pushing protected products

Tavistock has recently been trying to drum up interest for its protected funds which are backed by Morgan Stanley.

Last week it announced it would be launching a low cost D2C app to help raise the public profile of the funds.

Tavistock CEO Raven  told Portfolio Adviser the firm had already seen strong adviser demand for the funds which he called “a game changer” for the business. Since launching in May the funds have attracted combined inflows of £65m.

Over time Luceo might also distribute other Tavistock investment products like its MPS service.

Start of a successful relationship

Lighthouse chief executive Malcolm Streatfield said the group chose to partner with Tavistock on its Luceo subsidiary because of its track record in building an investment business of scale. Founded in 2014, Tavistock now has about £941m in funds under management.

Lighthouse currently has roughly 400 advisers in its network and some £5bn of assets under advice. Its Luceo brand, set up in September 2016 had £53m in assets as at 30 June 2018.

“I believe that this will be the start of a successful working relationship between Lighthouse and Tavistock,” said Streatfield.   

Raven agreed the establishment of a strategic relationship between Tavistock and Lighthouse is “a significant development for both groups”.

“We look forward to achieving considerable success together in the coming years,” he said.

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