Fairstone, one of the UK’s largest Chartered financial planning firms, has announced that it has signed up new firm Sabre Financial to its unique Downstream Buy Out (DBO) programme.
The new DBO deal is the ninth announced in 2020. It brings the total of funds under management added through Fairstone’s DBO programme so far this year to more than £1.3bn.
Sabre Financial has joined Fairstone through its unique DBO acquisition programme, increasing the firm’s strategic footprint in the South West. It marks another significant step forward in Fairstone’s growth plan for 2020.
The deal brings around 1,000 clients, four advisers and six support staff to the wider business as well as gross annual fee income of £1million and funds under management of over £160m.
Fairstone’s unique proprietary DBO acquisition model is built on acquiring sustainable growth and operates by integrating ambitious IFA firms into the group, typically over a two-year period, prior to final acquisition.
The focus of Fairstone’s approach is to attract businesses that do not want to sell today. Instead, they target robust and well-managed firms that want to grow and develop, therefore crystallising a higher overall valuation in the future. Significantly, the vast majority of companies that have successfully reached ultimate acquisition stage demonstrate continued organic growth and a higher valuation than expected at the outset of the journey with firms commonly exceeding their original aspirational sale value.
This latest deal with Sabre Financial marks the start of this phased pre-acquisition process. It also enable both firms to fully align in terms of culture and systems, while Sabre will also be able to take advantage of the regulatory, technical and operational support that Fairstone provides.
Sabre Financial is based in Kingsbridge, South Devon, and the firm specialises in pension planning and investment management.
Fairstone CEO Lee Hartley said: “We are delighted to welcome Sabre Financial into our Downstream Buy Out programme. The team at Sabre Financial bring a first-class and modern approach to their work, centred around building quality long-term client relationships, making them an excellent fit for Fairstone.
“Within Fairstone, we work hard to ensure our proposition gives firms the framework they need to significantly grow their businesses, without compromising on client service or independence and we look forward to working with the team at Sabre Financial to help them to grow their business further within our unique DBO programme.”
Company principals at Sabre Financial, Dale Came and Stuart Read, said that the prospect of being part of a larger organisation and the potential to create further growth, were deciding factors in partnering with Fairstone.
Sabre Financial principal Dale Came added: “We believe that a relationship built on trust between customer and adviser is paramount; this enables us to provide great advice and service. The move to Fairstone is key to ensuring that this continues moving forward.
“It allows us to grow our operation, remain independent and able to service client needs to the highest standard, whilst having the backing of one of the largest Chartered financial planning firms in the UK.”
Fairstone’s DBO programme continues to be a core driver of growth for the business, reversing the traditional buy and build approach, with integration playing the leading role in a firm joining the programme.
Fairstone CEO Lee Hartley added: “We are always looking for strong, high quality businesses with ambitious growth plans to join Fairstone. The strength of our DBO programme is demonstrated in the fact that all the firms we have gone on to acquire have received at least 100% of their premium sale value and many achieving much more, consolidating our position as a secure, stable and proven acquirer within the sector.”