THE Sottish fintech facing a £145 million takeover that staff have opposed amid fears about the impact on jobs has achieved a record performance on a key measure.
Nucleus Financial saw customers transfer £637 million funds in March for administration on its investment platforms. The figure is the highest ever recorded by Edinburgh-based Nucleus for gross inflows.
Chief executive David Ferguson said the company had reaped the rewards of its decision to maintain investment in its offering amid the challenges posed by the coronavirus crisis.
READ MORE: Fintech carries on hiring despite uncertainty caused by coronavirus
Stock markets plunged around the world after the crisis broke before bouncing back on hopes that vaccinations will fuel a strong global economic recovery.
“March was by far our best-ever month for inflows, a trend we’d hope to see continue as lockdown eases,” said Mr Ferguson.
Founded by Mr Ferguson in 2006, Nucleus has capitalised on historic changes in the pensions world, which have required people to take greater responsibility for saving for retirement.
The company received a number of takeover approaches last year.
In February, directors recommended shareholders accept a 188p per share cash offer from private-equity backed James Hay, which also offers platforms.
However, a People Representative Group of Nucleus employees said that the deal should be opposed amid “significant anxiety” about the impact on jobs at the firm. It employs around 400 people, including 130 based in Glasgow.
READ MORE: Edinburgh investment platform specialist acquires Glasgow business
In the document detailing the terms of its offer, which was published yesterday, Salisbury-based James Hay reiterated that there may be a moderate reduction in headcount at the enlarged group following the takeover.
It said a material number of Nucleus’ employees will transfer over the medium term to FNZ, which will provide platform technology for the enlarged group.
James Hay said in the offer document that it attaches great importance to the skills, experience and continued commitment of Nucleus’ management and employees.
The company said it intends to address the important points made by the PRG after its offer becomes unconditional with the full engagement and collaboration of Nucleus.
It added: “James Hay Holdings shares the view of the PRG that a successful Acquisition can only be achieved if the impact on people across the Combined Group is fully and meaningfully considered.”
READ MORE: Big vote of confidence in Scotland from pensions and investments giant
James Hay initially proposed to acquire Nucleus by way of a scheme of arrangement. This would have required the support of a majority of the holders of Nucleus shares.
After facing opposition from some shareholders, it then decided to make a takeover offer instead. This will require the support of holders of 75 per cent of the shares in Nucleus, but not a majority of shareholders.
James Hay has obtained irrevocable undertakings to support its offer from the holders of 55.88% of Nucleus shares, including Mr Ferguson.
He said last month that the prospect of the takeover had created an understandable air of uncertainty at Nucleus. This has also affected members of the management team.
Mr Ferguson noted then that takeover regulations meant he had not been able to have discussions with James Hay directors about any changes they may plan to make to the business.
READ MORE: Wealth manager eyes acquisitions in Scotland
South Africa’s Sanlam has undertaken to accept James Hay’s offer in respect of its controlling 52% holding in Nucleus.
In the offer document James Hay set 1pm on May 4 as the first closing date for acceptances
Nucleus saw total assets under administration rise by £301m net of outflows in the first quarter to £18 billion at March 31.
That left assets under administration up 28.4 per cent on the same point last year and by 3.1% on the previous quarter.
It noted yesterday that the FTSE All-Share Index increased 23.3% year-on-year in the 12 months to March 31 and by 4.3% on the last quarter.
The numbers of advisers and customers using the company’s platforms rose year-on-year and on the preceding quarter.
READ MORE: Should taxes paid by wealthy financiers be increased by Rishi Sunak?
Mr Ferguson said: “Profit for the year to date is ahead of the board’s expectations as a result of higher AUA and lower costs and we believe the business is well-positioned to accelerate inflow momentum and to expand our operating margin through the rest of this year and beyond.”
James Hay is owned by the Londoon-based Epiris private equity business.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel