Lonsec acquires Implemented Portfolios

Lonsec has announced the acquisition of an MDA provider to high-net wealth individuals and affluent retail clients, Implemented Portfolios Limited (IPL), during a time where advisers are increasingly recognising and valuing the significant time savings, and operational risk mitigation benefits of managed accounts.

Lonsec CEO, Mike Wright, commented on the company’s “deep history and commitment to helping advisers meet the needs of their clients” through managed account solutions and “market-leading qualitative investment research”.

“I am excited to have IPL joining the Lonsec Group to further enable us to meet the changing needs of advisers,” Mr Wright said.

With $131.2 billion funds under management (FUM), the Australian managed account market is rapidly growing with a five-year compounding annualized growth rate (CAGR) of almost 30 per cent a year.

Lonsec’s acquisition of IPL boosts their FUM to over $5 billion as well as expanding its complementary managed account solutions to be available to advisers, such as separately managed accounts (SMA) or the inclusion of MDA services.

Furthermore, the acquisition is also expected to diversify Lonsec’s business and positively impact its earnings and margins prior to synergies being realised.

Mr Wright added that the acquisition “will not distract from Lonsec’s core business activity of research and ratings” through the business units of Lonsec Research and SuperRatings.

“Lonsec is used for research and ratings by hundreds of fund managers, super funds, and thousands of advisers every day,” Mr Wright said.

“Importantly, to maintain its independence, Lonsec reaffirms its commitment not to issue retail managed funds.”

Mr Wright continued, stating Lonsec’s investment solutions business “harnesses the depth and breadth” of its widespread research in regards to constructing portfolios.

He also stated they are “looking forward” to sharing intellectual capital with the IPL team in order to potentially “leverage when constructing and managing client portfolios” and expressed his excitement to “welcome and learn from the experienced, professional IPL team.”

Greg Kirk, executive chair of IPL, said that IPL has been “changing the conversation about portfolio construction taking place within advice practices,” since 2010 and that the acquisition is set to expand as part of the Lonsec group.

Going forward, IPL and Lonsec will be managed separately, with IPL becoming a subsidiary of Lonsec, and retaining all its current staff for the sake of continuity for clients and partners. Mr Wright will now be IPL’s new CEO, while Mr Kirk will remain a non-executive director of IPL.