Alpha Financial Markets Consulting goes public to ramp up growth

26 September 2017 6 min. read
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Alpha Financial Markets Consulting, a fast growing consultancy firm for the asset and wealth management industry, has announced its intension to go public. By trading on the AIM market of the London Stock Exchange, which is expected to take place next month, the London headquartered firm aims at paving the way for further global expansion.

Founded in 2003 in the UK, Alpha Financial Markets Consulting (Alpha) provides independent advice and expert insight to asset and wealth managers, as well as boasts a suite of proprietary benchmarking data and other technology solutions. Its pure-play focus on the asset and wealth segment within the financial services landscape has helped the consulting firm differentiate itself from more generalist management consultancy businesses and build a strong track record in the field – Euan Fraser, the firm’s Chief Executive Officer, even speaks of “an unrivalled track record” in the landscape.

“Alpha has built a fabulous reputation and brand within the sector. This is due to our truly outstanding team of consultants, who are passionate about delivering the very highest quality service to our clients on every single engagement,” he says. Since inception, Alpha has provided services to over 200 clients, including 17 of the 20 largest global asset managers by Assets under Management (AuM).

Alpha goes public to ramp up growth

Fast growth

Especially in the last six years, Alpha has enjoyed substantial growth*, driven by strong market demand for its consulting and benchmarking services. The consultancy today has a team of over 250 consultants and contractors, generating roughly £44 million in revenues, based in nine major cities: London, Edinburgh, New York (2009), Boston, Paris (2010), Geneva (opened in March 2017), The Hague (established in November 2014), Luxembourg (2008) and Singapore. Alpha also has a presence in Germany – the advisory business recently completed an acquisition of German boutique, which brought additional consulting and technology expertise to the group.

Despite its growth momentum, Fraser says that the firm is finding itself and its clients in a period of rapid change – both factors have prompted the consultancy to ramp up its investment base. The consulting market is undergoing a major transition, according to some the industry is on the brink of disruption from new competitors, the rise of digital players, and the changing role expected from advisors, as client tie up their beliefs on the value of external specialists. In the asset and wealth management industry, players are experiencing large challenges stemming from regulatory changes and cost pressures from the regulators and end clients. Among the challenges are the need for wealth managers to have stronger digital offerings (as found by a recent study by Strategy&), clients who are demanding greater price transparency (highlighted by a recent EY report) and a shift in the strategic priorities keeping executives busy in boardrooms (as concluded by Roland Berger in a 2017 analysis).

“Whilst overall AuM is growing, changing expectations from regulators and end clients are driving an increased focus by asset and wealth managers on improving systems, data quality and operational processes, in order to gain a competitive advantage, generate above average returns and reduce costs”, explains Fraser.

We are delighted to be joining AIM at such a pivotal time in the company's development

Going public on the AIM is, according to the chief executive, backed by three main objectives. Firstly, the firm, which, similar to AlixPartners and PA Consulting Group is backed by a private equity firm** and wants to free funds to further grow its footprint, both in existing as well as new markets. “It will enable us to invest more readily in future expansion through the pay down of all existing debt facilities.” Secondly, the growth capital will be leveraged to help the consulting firm move into additional parts of the asset and wealth management value chain – Alpha has, however, not unveiled which segments it is eyeing. The third pillar is focused on branding and recognition – “admission to AIM will further enhance Alpha’s profile and brand recognition amongst potential clients.”

The listing is forecasted to go into effect next month, with the IPO advised on by corporate banker Berenberg and the corporate finance arm of Grant Thornton. Fraser concludes, “We are delighted to be joining AIM at such a pivotal time in the company's development.”

Publicly listed consulting firms

With the move, Alpha Financial Markets Consulting follows in the footsteps of several, mainly large players in the industry. Among the most well-known listed consultancies are Accenture, Booz Allen Hamilton, Capgemini and CGI – all four players belong to the globe’s 10 largest consulting firms. The large majority of consulting firms, including the likes of the Big Four and the large American strategy houses, still opt to stick to a partnership model.

* See the article ‘The fastest growing management consulting firms of Europe’ for an overview of the fastest growing consultancies.

** In February 2016, Dunedin backed a secondary buyout of the business in an £80 million deal, buying the firm from Baird Capital, which invested in the consultancy in October 2013.