WT Financial JVs with PE player Merchant

Three years after setting up shop in Australia with a view to providing capital to independent financial advice firms, Merchant Wealth Partners has entered a joint venture with WT Financial Group to provide ‘patient capital’ to back growth of advice businesses.

Merchant announced its entry to Australia back in 2022 amid the exit of the major banks from the wealth management space and has now entered into a 50/50 joint venture with WT Financial Group with the announcement stating it will “provide ‘patient capital’ and strategic support to entrepreneurial advice businesses, particularly those within WTL’s existing networks: Wealth Today, Sentry Advice, Synchron Advice, and Millennium3.

The joint venture entity WTL & MWP Investco Pty Ltd, will do the bulk of the investment capital heavy lifting.

The announcement said that unlike traditional private equity, the joint venture model would be long-term focused and non-controlling, “giving financial advice practices the autonomy to continue operating independently while receiving backing to expand organically and through acquisitions”.

The joint venture vehicle will take minority stakes (typically 20% to 40%) in what it sees as high potential advice firms helping them to gain scale through capital injections, operational support, and strategic guidance.

The announcement said that Merchant will be providing the majority of the investment capital behind the joint venture while WT Financial will “lead opportunity sourcing, due diligence, and ongoing management”.

It said WT Financial also has the option to convert its deal-sourcing fees into equity in Hubcos or preference shares in the Investco and may match Merchant’s capital contributions in the future.