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(Bloomberg) — Australian fund manager Perpetual Ltd. agreed to sell its wealth management unit to buyout firm Bain Capital for A$500 million ($350 million) as the nation’s wealth sector continues to draw global investors keen on grabbing a slice of the A$4.5 trillion pension pool.
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Australia’s pool of retirement savings — currently the world’s fourth-largest and the fastest growing among developed nations — is forecast to top the UK and Canada by the early 2030s to become the second-largest globally.
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“The Australian wealth sector is growing strongly, underpinned by macro trends including an aging population, wage growth and the need to manage intergenerational transfers of A$5 trillion-plus over coming decades,” Bain’s Charles Lawson, who co-led the investment in Perpetual, said in a statement Monday.
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“Against this backdrop, financial advice in Australia remains highly fragmented and we believe there will be opportunities to help drive consolidation through the Perpetual Wealth Management business,” he said.
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Perpetual’s wealth unit had A$21.9 billion of funds under advice as of Dec. 31. It services high-net worth clients, not-for-profit organizations and private businesses.
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The sale is another foray by an international firm tapping Australia’s booming pensions and wealth market. Last year, CC Capital Partners agreed to buy Insignia Financial Ltd., another major player in the sector, in a deal worth around A$3.3 billion.
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Perpetual has been trying to sell its wealth management business for around two years as part of a restructuring plan. An earlier attempt to offload the unit to KKR & Co. fell apart due to an unexpected tax bill.
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On top of the sale price, there is an potential additional upfront cash payment based on the business’s performance before completion of the deal, Perpetual said in a statement. There is also an earnout payment of up to A$50 million based on the unit’s performance in the two years after the sale.
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As part of the sale, Perpetual will license the ‘Perpetual Wealth’ and ‘Perpetual Private’ brands to Bain for 15 years.
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Barrenjoey Capital Partners is advising Perpetual on the deal.
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(Adds comment from Bain in third paragraph.)
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English (US)