Barrett’s AZ NGA reshaping planning landscape

ANALYSIS

Paul Barrett’s AZ NGA has arguably dominated the changing face of the Australian financial advice landscape in 2024 without ever actually directly owning an Australian Financial Services License (AFSL).

As the advice sector enters the last quarter of the year, AZ NGA’s strategy alongside Entireti (Fortnum Private Wealth) to substantially acquire the AMP financial advice business will be seen as the most transformational transaction for the advice sector this year.

This has now been followed up by confirmation that US private capital heavyweight, Oaktree Capital Management has invested $240 million in AZ NGA – something which arguably opens the door to more strategic financial advice and accounting acquisitions moving into 2025.

Oaktree had, in fact, been standing in the wings for AZ NGA since the middle of the year and it is significant that it confirmed its investment little more than a month after the AMP transaction was bolted down.

And, given the commercial model underpinning the AZ NGA approach of acquiring equity stakes in financial advice and accounting firms, Oaktree’s injection of capital is important given the maturing status of those stakes and its continuing growth agenda.

The Oaktree injection was also important for AZ NGA’s long-term backer, Italian-based Azimut which bankrolled the Australian business 10 years ago. It remains committed as a long-term investor with “a stake of at least 25% in the business”.

The bottom line is that the Oaktree investment is a clear signal that AZ NGA aims to continue its growth trajectory, with Azimut saying that it would work with Oaktree to “accelerate acquisition and consolidation activity”.

“The transaction is consistent with AZ NGA’s strategy to acquire, merge and consolidate businesses into Super firms; invest in business services to form a national Centre of Excellence; and establish a national advice firm,” Azimut said.

“Oaktree’s backing of AZ NGA will deliver a range of benefits including capital to fund the group’s short-to-medium term plans, management expertise and access to Oaktree’s global experience, resources and network.”

Azimut said the Oaktree transaction values AZ NGA at a total enterprise value of $690 million which, for context, is around six times the market capitalisation of publicly-listed Count Limited.