Frenkel Topping investigating possible sale

Independent financial advisor and asset manager focused on asset protection for vulnerable clients, Frenkel Topping, announced that its board was reviewing strategic options to accelerate the enhancement in its competitive positioning and maximise shareholder value, including a potential sale of the group.

The AIM-traded firm’s board said it believed that its recent initiatives ensured that the group was strongly positioned to accelerate its year-on-year growth in assets under management and deliver a step change in its profitability.

It said the announcement in February of the change in the Ogden discount rate had dramatically changed how compensation damages were calculated.

The group estimated that the size of court damages would likely grow substantially - with an average potential uplift of around 80% - and there would be an increase in client preferences for lump sum amounts to be managed, as opposed to periodical payment orders.

Those factors were expected to increase the market opportunity significantly and result in a material uplift in the rate of assets under management growth for Frenkel Topping.

The board said it was of the opinion that the scale of the opportunity presenting itself was sufficiently large that in order for Frenkel Topping to capture it fully and make best use of its potential, it may require the group to combine with a larger, strategic partner.

That would enable the group to take advantage of its competitive positioning more effectively and more quickly than it could be “prudently expected” to do on its own, and in doing so also generated potentially significant incremental synergies and maximise shareholder value.

In order for the board to investigate that strategic option sufficiently with prospective partners who may be able to accelerate the growth of the business and help fulfil its considerable potential, the board said it believed it necessary for the group to enter into a formal sale process.

In all circumstances, the board said it remained committed to pursuing the most appropriate course of action for the clients, shareholders and employees of Frenkel Topping.

“Since 2015, the management and board have successfully implemented a range of strategic initiatives transforming Frenkel Topping both in terms of enhancing our client service proposition and developing a highly scalable platform to drive growth in AUM and profitability,” said executive chairman Jason Granite.

“Whilst the competitive positioning and potential of the firm has been further enhanced by the Ogden discount rate review, the board recognises that a strategic partner has the capability to maximise the group's potential, to the benefit of our clients, shareholders and employees.”