finnCap, the financial services advisory firm, has today issued a research report on Kingswood Holdings Limited (trading as Kingswood) AIM-listed (AIM: KWG), the international fully integrated wealth management group. In the report, FinnCap recommends that Kingswood has the potential to deliver c£20.0m EBITDA and should hold a target share price of 39p.
Kingswood has completely transformed itself within the space of just a few years. Since David Lawrence joined the business as UK Chief Executive in December 2020, the UK business has significantly increased its acquisition activity as well as introducing a strong integration capability, organic growth credentials and a focussed investment in client centricity and its colleague proposition. The same impact has been seen under Mike Nessims leadership of the US business which has seen a rapid organic onboarding of new broker dealers and transformative revenues from this and its investment banking activity.
Kingswood have delivered on eight acquisitions in the UK most notably Kingswood acquired IBOSS, a leading provider of Managed Portfolio Services and other investment solutions on both an advisory and discretionary basis to UK IFAs, which has over 6,000 clients with over £1.4 billion of AUA/M. The opportunity created with the IBOSS deal creates an open market distribution capability and a curated acquisition pipeline of IBOSS firms who may wish to discuss a possible exit.
Kingswood has evolved into growing international vertically integrated wealth and investment management group with £9.1 billion of Assets under Advice and Management and over 19,300 clients. This foundation now presents Kingswood with the opportunity to consolidate a US market with attractive fundamentals while building upon significant recent progress made in the UK market. There is a significant pipeline of further acquisition opportunities fuelling the ambition to grow UK AUM to over £10bn, and Kingswood has the balance sheet to do so. The firm has been backed by global alternative asset manager, Pollen Street Capital, who have provided up to £80m of growth capital to fund acquisitions. The strategy is progressing as planned, despite the interruption of COVID, and a further pipeline of future acquisitions is being executed.
The firm has benefited from the wider sector offering long-term growth characteristics. This is supported by demographic trends, the requirement to provide for retirement, as well as the complexity of legislation, regulation and consolidation of a fragmented sector. In addition, there will be an ongoing convergence of investment management and financial planning, with holistic financial planning and advice becoming central to the overall client proposition.
finnCap believes that investors can benefit from the potential for outsized returns, outperforming any existing publicly listed wealth management model, whether driven by consolidation or otherwise. Kingswood now has the potential to harvest the results of increasing scale from a low base within a growth market and implement this rapidly across global markets, in the first instance in the UK and US.
Kingswood Holdings Limited (trading as Kingswood) is an AIM-listed (AIM: KWG) international fully integrated wealth management group with £9.1bn billion of Assets under Advice and Management. It services circa 19,300 clients from a growing network of offices in the UK including Abingdon, Beverley, Conisbrough, Darlington, Derby, Eastleigh, Grimsby, Harrogate, Hull, Lincoln, London, Maidstone, Newcastle, Sheffield (2), Worcester and York with overseas offices in Johannesburg, South Africa and Atlanta, New York and San Diego in US.
Kingswood offers a range of trusted investment solutions to its clients, which range from private individuals to some of the UK’s largest universities and institutions, including investment advice and management, personal and company pensions and wealth planning. Kingswood is focused on becoming a leading player in the wealth and investment management market through targeted acquisitions in the UK and US, creating a global business through strategic partnerships.