Wealth Management Business

Here’s a late but completely predictable entrant into the auction to buy Perpetual’s $500 million-odd wealth management business.

Street Talk understands Mike Murphy’s Bain Capital has lobbed a first-round bid for the unit, less than a month after it pulled out of the race to acquire superannuation and wealth management giant Insignia Financial, leaving CC Capital as the sole bidder.

If Bain pursues this with even half of the fervour it showed for Insignia, it will be a formidable opponent for rival bidders TA Associates and Oaktree Capital Management-backed advisory group AZ NGA. Street Talk revealed the pair had tabled bids late May and are expected to advance to the second round.

Still, it shows just how keen Bain is on getting exposure to Australia’s financial services sector. It tapped out of Insignia in mid-May, citing “macro uncertainty” stemming from volatility in global capital markets.

Bain’s presence in the process will be welcomed by sell-side advisers Barrenjoey and King & Wood Malleson, turning the auction into a three-horse race.

Mason Stevens, owned by local sponsor Adamantem Capital, swerved the auction, as did FirstCape, the National Australia Bank and Jarden wealth management vehicle that’s backed by Pacific Equity Partners.

Bain Capital knows what it takes to pull off a successful take-private, sweeping aged care business Estia Health off the ASX in 2023. The Boston-based private equity player also swung the bat hard at Bapcor last year, took a good look at APM Human Services and bought out Virgin Australia in the depths of the COVID-19 pandemic. Bain is expected to decide the timetable for its circa $4 billion float by Wednesday.

The sale comes after Perpetual terminated talks with private capital giant Kohlberg Kravis Roberts for a $1.4 billion carve-out of its wealth and corporate trustee arms last year after it was handed a tax bill of almost five times its initial estimate. The deal was reshaped as a standalone wealth management auction to shore up the group’s balance sheet.

Bidders are picking over the $21 billion unit as it bleeds talent to rival Ord Minnett, which poached half a dozen of its advisers late last year. Perpetual hit back, nabbing Ord Minnett’s Queensland high-net-worth advice duo Michael Innes and Antony Pupovac in April. Perpetual wealth reported $900 million in net inflows in the third quarter due to a “significant new client win”.

MST analyst Lafitani Sotiriou has valued the wealth management business at $506 million in a sum of the parts valuation, or 8.5 times FY25 estimated earnings. On the more generous side of things, JPMorgan’s SOTP put wealth management at 15 times calendar year 2026 net profit after tax ($46.6 million), or $699 million.