Permira’s 12-year hold of wealth manager Evelyn Partners involved a host of twists and turns, from several rewrites of its entire investment case to convincing its investment committee that a longer hold was in order. It’s a journey that tells the story of the shifts in European financial services M&A of the last decade – and its ending shows what type of sales are available for other PE firms looking to exit in the market today.
Permira and Warburg Pincus agreed to sell London-based Evelyn Partners to NatWest in February at an enterprise value of £2.7 billion ($3.7 billion; €3.1 billion). Permira’s investors will make over 3x on the transaction, adding to the firm’s record €13.2 billion LTM period of LP distributions, according to sources close to the transaction.
All exit options for Evelyn were open, Chris Pell, managing director at Permira, told PE Hub. However, the idea to list the business was parked fairly quickly, due to the performance of the UK IPO market.
Evelyn Partners had already been attractive to strategics a couple of years ago, but its recent financial performance was a game changer, said Pell. While the deal is still a transformational one for NatWest, it’s a lot more digestible financially now than it was two years ago, Pell added.
“Given where their share prices were trading [a couple of years ago] – the market cap of NatWest or Barclays was around a third to a half of what it is today – financially it made more sense for them to just keep doing share buybacks rather than M&A,” he added. That, coupled with UK banks increasingly looking to add wealth management services, helped seal the deal with NatWest.
Secret sauce
Rewinding 12 years, Permira was on the lookout for a wealth management asset. “Effectively, the banks had pulled out of providing advice in the UK post-financial crisis and post-Retail Distribution Review,” said Pell. “We identified a real gap in the market to either buy or create a strong independent player in the wealth management space.”
The firm settled on Bestinvest, which Permira acquired at an enterprise value of £160 million, according to sources close the matter.
Add-ons for the platform were selective. Tilney, a private client investment manager, was the first to be merged with the Bestinvest platform in 2014. The next piece of the puzzle was Towry, acquired by Permira from Palamon Capital for £600 million in 2016.
“We invested more equity into that deal than we did in the original Bestinvest transaction, so we had to go back to our investment committee, effectively re-underwrite the entire investment case on this combination and push out the exit a bit further,” said Pell.
Towry’s financial planning capabilities were transformational and also highly sought-after by all buyers during the eventual exit process, according to Pell. “That’s really been the secret sauce of the business,” he added.
The last merger came in the form of professional services business Smith & Williamson, which Permira added on to the platform in 2020 at an enterprise value of £625 million, according to sources close to the matter. Shortly after, Warburg Pincus joined as a minority co-investor.
“Kudos to Warburg Pincus for joining in the middle of the covid crisis in 2020,” said Pell. “It was a bold decision from them, but they were completely aligned with our vision, and we’ve worked hand in glove together since then.”
The professional services business only stayed with the now re-branded Evelyn Partners for a couple of years. Permira divested the division in 2025, with Apax Partners as the buyer. That sale yielded 15x EBITDA, according to the sources.
“If we’d decided to go down the IPO route, we may have left it as part of the group,” Pell explained. “But for the banks as strategic buyers, they don’t want to own an accounting business or a tax business. Fortuitously, professional services had become the hot new sector in private equity, so there was a lot of demand for S&W as a standalone business.”
Through the noise
Permira is still open to the prospect of transacting in the wealth management sector. “On the supply side, the market has changed in that the banks re-entered the advice market,” said Pell. “That’s positive for exits overall, but on the buyside it means you will be up against these large, well-funded competitors in bidding processes.”
Pell said the market is trying to digest a lot of noise, referring to recent AI disruption to share prices. “Yesterday, it was wealth management and financial planning businesses all dropping 10 percent,” he said. “The day before it was insurance. As always, there is an abrupt reaction in the public markets, but over the long term it’ll be about who are the winners and who are the losers.”
Those winners and losers will be differentiated by who is embracing the new tools and technologies, and “who will be the Kodaks of the era,” Pell said.
