Parmenion owners prepare £400m sale in fresh blow to abrdn

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A money manager for independent financial advisers that was sold by the fund manager Abrdn for £102m just 18 months ago is exploring a sale that could value it at up to four times that sum.

Sky News has learnt that Parmenion, which has about £9bn in assets under management (AUM), is being marketed to potential strategic investors.

City sources said on Wednesday that Parmenion’s shareholders were keen to sell a significant stake at a valuation of £300m and £400m, generating a handsome return on their March 2021 deal.

The transformation in the platform’s valuation in such a short period will be an embarrassment to abrdn shortly after it dropped out of London’s blue-chip FTSE-100 share index.

That embarrassment will be accentuated by the fact that a 30% stake in Parmenion is owned by AssetCo, the vehicle spearheaded by abrdn’s former chief executive, Martin Gilbert.

The remainder of Parmenion’s equity is held by Preservation Capital Partners, a private equity firm.

Fenchurch Advisory Partners, the investment banking boutique headed by Malik Karim, the Conservative Party treasurer, is advising on the latest stake sale.

It also advised Standard Life Aberdeen – as abrdn was then known – on the original transaction last year.

Insiders said Preservation and AssetCo were unlikely to sell the entirety of their stakes in Parmenion, although a knockout offer could persuade them to reconsider this.

The decision by Stephen Bird, abrdn’s chief executive, to offload the business last year formed part of his efforts to simplify what, under Mr Gilbert, had become a sprawling asset management and broader financial services group.

Since being formed from the merger of Standard Life and Aberdeen Asset Management five years ago, the group has seen its market capitalisation slump.

On Wednesday, shares in abrdn closed at 153.65p, having fallen more than 40% during the last year.

Abrdn is now valued at just £3.3bn, having spent £1.5bn on acquiring Interactive Investor, the direct-to-consumer investment platform, last year.

The soaring valuation of Parmenion does have one positive implication for abrdn, according to a person close to the FTSE-250 asset manager.

Based on their respective market share data, abrdn’s own platform business would be valued at up to £1.7bn, according to one insider.

Parmenion was acquired by Aberdeen Asset Management during Mr Gilbert’s tenure for about £50m.

Mr Gilbert said at the time that the business would put Aberdeen “at the forefront of the digital revolution in asset management”.

On Wednesday, Parmenion said it had agreed to buy Midlands-based EBI Portfolios, which administers £1.9bn in funds, for an undisclosed sum.

Parmenion and Fenchurch declined to comment.

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