The firm’s maiden set of results, published today, revealed that discretionary AUM in its DFM business, Tatton Capital, increased from £3.85bn at the end of March this year to £4.44bn at the end of September – a 15% rise.
It said monthly inflows averaged more than £80m during the period, buoyed by an increase in the number of IFAs using its DFM service.
Indeed, the number of IFA firms on the platform increased from 207 during the six months ended 30 September 2016, to 286 during the same period this year.
It said growth was driven by a strong demand for a “low-cost DFM service” from IFAs.
TAM chief executive Paul Hogarth (pictured) said: “More and more IFA businesses are finding it difficult to manage money on platforms by themselves.
“We are at the lower end of the fee charging scale at 15 basis points. We can do the job and work in partnership with them on the platform and they can do the cashflow management and the financial management.”
To capitalise on AUM growth and IFA demand, Hogarth said TAM is actively looking at M&A activity or forming strategic partnerships with distribution businesses or platforms where TAM could white-label investment solutions.
“We do not have a specific target as yet but we are looking at all the possible opportunities in M&A,” he said. “That could be going out to buy another distribution business similar to our own, it could be going out to buy subscale DFMs.
“I think Mifid II could leave questions for a few IFAs as to whether they want to run subscale DFMs or pass control of that away. We could even look at a research business and get involved at that end.”
Elsewhere, the firm reported profit before tax decreased to £0.54m, down from £1.86m at the end of September 2016. This was due to accounting for a £1.6m cost for its initial public offering (IPO) and share option costs of £0.9m.
TAM floated on the alternative investment market (Aim) in July which raised £51.6m, including £10m of new money.
The business subsequently split into three operating subsidiaries: Tatton Capital (36%), Paradigm Partners (49%), and Paradigm Mortgage Services (15%).
Hogarth described the IPO as “the best thing we could have done”, as it significantly boosted TAM’s public profile.
Paradigm Partners, the group’s compliance services business, saw members jump to 356 for the six months ended 30 September 2017, compared with 347 for the same period the year before. Its revenues increased 23% to £3.48m.
Meanwhile, Paradigm Mortgage Services saw gross lending via its channels of £2.99bn during the period, a 27% increase on the year before.
