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IIFL Wealth to acquire south India-focussed wealth management firm for $35 mn

IIFL Wealth Management Ltd, a unit of financial services company IIFL Holdings, will acquire Chennai-based wealth management company Wealth Advisors India Pvt. Ltd for Rs 253.6 crore (around $35 million at current exchange rates) in cash.

In a stock-exchange disclosure, IIFL Holdings said the acquisition of Wealth Advisors will help IIFL Wealth increase its client base and further its expansion into portfolio management and investment advisory business in southern India.

“This deal brings us some top-quality talent by way of sales and non-sales teams and our combined effort will further strengthen our reach and offerings for the high net worth clients and ultra-high net worth clients,” said Karan Bhagat, founder and chief executive of IIFL Wealth Management.

Following the acquisition, Wealth Advisors will become a wholly-owned subsidiary of IIFL Wealth Management. The deal is subject to regulatory approvals and IIFL expects the formalities to be completed by mid-February next year. The transaction includes cash and cash equivalents of Rs 18.58 crore which will be adjusted on the closing date.

Equirus Capital acted as the adviser to Wealth Advisors on this transaction.

Incorporated in 2004, Wealth Advisors was founded by V Mahadevan and Pramod Kumar. It primarily provides portfolio management, investment advisory and sub-broking services. Wealth Advisors mainly focusses on south India and says it one of the largest wealth management firms in the region.

The company’s consolidated revenue stood at Rs 30.15 crore in the year ended March 2018, up from Rs 22.73 crore in the previous fiscal.

IIFL Wealth

The wealth management arm of IIFL (formerly India Infoline) provides services such as asset management, trust and estate advisory, tax planning, corporate advisory and lending solutions.

In June, IIFL Wealth had raised Rs 746 crore (about $110 million) from a clutch of investors including Hong Kong-based Ward Ferry and existing private equity backer General Atlantic.

In September, IIFL Wealth had agreed to acquire Bengaluru-based fintech firm Altiore Capital for Rs 9.2 crore ($1.2 million).

Mumbai-based IIFL Wealth has 23 offices in eight countries as of March 2018.

IIFL Wealth was launched in 2008. The firm was largely known for wealth management services, besides real estate-focussed private equity funds and hedge funds. However, it has been slowly building up its alternative investment practice. Over the past year, it has focussed on raising a large corpus for pre-IPO investments. IIFL Wealth also has a seed fund.

The unit had contributed Rs 834 crore to IIFL Holdings’ total income in 2016-17.

As of September 2018, investment firm Fairfax India Holdings held a 35.42% stake in IIFL Wealth’s parent, IIFL Holdings.

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