Allfunds has today (28 July) signed a strategic agreement with Italy's BCC Iccrea Group to acquire the local paying agent business of Iccrea Banca.
 
The Memorandum of Understanding sees Allfunds acquire Iccrea Banca's local paying agent business (Banca Corrispondente e Banca Agente), with a related exclusivity agreement. 

Iccrea Banca is the parent company of Gruppo BCC Iccrea, the largest Italian cooperative banking group, ranked as the fourth largest banking group by total assets (€173.5bn) and third by number of branches in Italy (2,440).

BCC Iccrea Group was formed in 2019 as part of the reform of Italian Cooperative Credit Banks with 120 cooperative banks (BCCs).

With this transaction, Allfunds further said it will build upon its position in the Banca Corrispondente or local paying agent business in Italy to better serve customers, while strengthening the partnership with an important financial institution in the country.

The transaction will be Adj. EBITDA margin and EPS accretive from year 1 in consideration of the improved level of services and broader portfolio offered to clients, the statement said. 

It would have a neutral impact on Allfunds Banking Group's liquidity position, as the acquisition will be fully funded through the Allfunds Group revolving credit facility.

Juan Alcaraz, Allfunds' founder and CEO, said: "I am very pleased that we have entered this agreement with Iccrea Banca, parent company of BCC Iccrea Group, one of the leading players in the Italian banking sector. Being one of our core markets, in which we have been present since 2003, this transaction will contribute to our ambition to remain the top choice for any Italian institution in the WealthTech segment, by providing cutting-edge and comprehensive solutions for our clients. Our integrated offering will certainly help Iccrea to deliver superior added value to their clients."

Mauro Pastore, general manager of the BCC Iccrea Group added: "This agreement is part of the BCC Iccrea Group's strategy aimed at supporting development projects in the area of asset management, which correspondent banking is closely related to, and at improving the level of services related to access to financial markets provided to our BCCs and their customers. This transaction will allow us to capitalise on the value of these assets and to further increase our solid capital ratios."

The transaction is expected to be signed before the end of the third quarter of 2023 and closed before the end of the year, subject to customary closing conditions. Further terms of the transaction were not disclosed.

Allfunds also published its interim results for the six-month period ended 30 June 202 today including the launch of a €100m share buy-back programme to repurchase its ordinary shares (up to a maximum total value of €100m on Euronext Amsterdam).

Assets under administration were up 3.7% year-on-year, from €1,301bn to €1,350bn. This compares to a 3.7% increase for the industry over the same period.

Allfunds said it had made further partnership agreements across its various global hubs, particularly in the Nordics, Hong Kong and Singapore.

"The partnerships with Länsförsäkringar Fondliv and Endowus respectively have strengthened local institutional investors' access to best-in-class digital products and empowered them to make better portfolio decisions, while ultimately achieving unique investment goals more efficiently.

"Partnerships made during the period have contributed more than €20bn AuA in this period", the statement said.

Further key points included:

  • AuA growing by 4.1% on Full Year 2022 despite organic outflows concentrated in a very limited and identified number of retail banks in Switzerland, Italy and Spain;  flows from new customers poised to accelerate in 2H as per current customer pipeline
  • Platform service positive market performance of €41 billion or 4.5% since December 2022
  • Platform service net organic flows of €(4.0) billion or (0.4)% since December 2022 (-0.9% annualised) 
  • Record half-year net revenues, in the history of Allfunds: net revenues of €266m, a record half-year figure representing a 13% increase half-on-half and a 3% year-on-year
  • Platform revenues, including NTI, amounted to €239m
  • Adjusted EBITDA of €172m, a 6% increase half-on-half and implying an adjusted EBITDA margin of 65%, in line with 2023 our expectations
  • Record reported EBITDA of €150m, following the significant reduction of separately disclosed items bringing an alignment of adjusted and reported figures
  • 44 new fund houses and 31 new distributors onboarded in 1H 2023
  • Limited impact from new European Retail Investment Strategy given < 1% AuA exposure to execution-only services

Juan Alcaraz, chief executive officer and founder, said: "I am pleased to report that Allfunds has continued to deliver strong financial and operational performance, posting record revenues in the first half of 2023. I am encouraged at the performance of our platform and subscription-based businesses, which continue to contribute to the performance we deliver for our clients, investors and the wider stakeholder universe. The resilience of our business model and the quality and diversification of our earnings are becoming more and more obvious; we are proud, therefore, to announce the introduction of a share buy-back programme, demonstrating our commitment to driving further value for shareholders.
 
"Allfunds has accomplished several important milestones during the period, illustrating the effectiveness of its strategy in continuing to deliver growth and efficiencies despite a persistently volatile macroeconomic backdrop. The successful integration of WebFG, instiHub and MainStreet Partners has contributed meaningfully to the expertise of our global teams, while also strengthening their ability to meet changing client demands.

"The launch of our Alternatives Solutions platform was a further strategic highlight, and will provide new solutions to help our clients meet their unique strategic priorities. We are investing organically for growth, while also remaining vigilant on emerging growth opportunities through bolt-on acquisitions. We enter the second half of 2023 with good momentum, unchanged targets and in a strong position to continue delivering against our overarching strategy."