Standard Life is close to sealing a deal to buy the AXA Elevate platform with a bid which could be worth up to £250 million.
The French insurance giant has been looking to sell the platform since the end of last year alongside other parts of its AXA Wealth business.
New Model Adviser® revealed last September that AXA was looking to sell the platform alongside life insurer SunLife and investment company AXA Isle of Man. It appointed Barclays to sound out buyers for the combined businesses.
However, it is understood the combined entities did not attract a bidder. As a result AXA appointed Fenchurch Advisory Services to look into selling the businesses as separate parts.
New Model Adviser® understands Standard Life is the preferred buyer for Elevate, after beating Zurich in a bidding war for the platform.
Sources familiar with the situation said Standard Life’s bid was worth up to £250 million, depending on certain conditions being met.
Earlier this month Bloomberg reported that Standard Life was bidding for Elevate. The report said other bidders had been sounded out to buy SunLife and the Isle of Man business, and overall the deals could be worth as much as £700 million.
Financial pitfalls
The Elevate platform was launched in 2008 and is currently part of the AXA Wealth business. At the end of 2015 it had £10.5 billion of assets under administration.
However, serious question marks have been raised over the future success of the platform.
Financial statements for AXA Portfolio Services, the AXA-owned company which contains AXA Elevate, revealed the company made a pre-tax loss of £17 million in 2014.
Any deal would be the first time a major adviser platform has bought a competitor in the UK.
Barry Neilson, business development director at Nucleus, said acquiring a platform would bring up a number of issues for the buyer.
‘Any [platform] acquisitions that do happen have to be transformational in terms of scale for the purchaser to make it worthwhile,’ he said.
‘Platforms are only as valuable as the sustainability of client revenues and it’s the advisers that ultimately control when and why clients move. Any platform buying another platform would have to make a sensible assumption about how much of the assets they expect to lose.’
AXA, Standard Life and Zurich all declined to comment.
Source: New Model Adviser