On Monday, Diverger announced its acquisition of a 55 per cent stake in Melbourne-based Paragem advice firm Atkinson Saynor Private Wealth, utilising its transitional equity model.
This transaction marks Diverger’s second foray into transitional equity investments following its initial investment in 2022. In that instance, Diverger acquired a 35 per cent equity interest in McGregor Wealth Management, a Queensland-based company seeking support for its future growth plans.
Speaking to ifa, Diverger chief executive officer Nathan Jacobsen confirmed the firm has more such investments in the works.
“There are several more in the pipeline but obviously subject to successful completion,” he said.
This latest investment is designed to help Atkinson Saynor Private Wealth transition the business to the next generation while delivering a targeted return on invested capital for Diverger shareholders.
“These succession issues and obstacles to growth are a key challenge for many advice firms, but with an injection of capital, a tailored yet flexible equity model and a partnership with a like-minded partner, these can be overcome,” said Mr Jacobsen.
According to the team at Atkinson Saynor Private Wealth, the investment is the start of the next chapter.
“We are pleased to partner with Diverger who we believe have developed a transitional equity arrangement that is flexible enough to be tailored to both the circumstances of our business and to our needs,” said outgoing principal Steve Atkinson.
The incoming principal, David Saynor, added the firm now has a “concrete plan for the future”, as well as the ability to provide its clients with a generational advice model that can service more Australians moving forward.
Diverger’s flexible transitional equity model accommodates both short and long-term partnerships to cater to the specific needs of advice firms.
Depending on their goals, a business can either agree to repurchase shares or facilitate their sale to successors or opt for a long-term hold if there is mutual viability, a strong partnership, and an agreement on future growth plans.
“There are a lot of single shareholder practices in the $1–3 million range with significant growth ambitions but constrained by various factors,” said Mr Jacobsen.
“We talk to the principal and map out a pathway to growth and then look at investing capital and resources to support that growth.
We are passionate advocates for the future of advice to ensure its sustainability so Australians can access financial advice when they need to.”
