British financial advice platform Nucleus prepares for sale, sources say

LONDON, Sept 15 (Reuters) - HPS Investment Partners is weighing a sale of British financial advice platform Nucleus Financial Platforms, four people familiar with the matter told Reuters.

The private credit group, which was acquired by BlackRock last year, has held talks with advisers about a possible sale of the Salisbury, south England-based company, said the people, who requested anonymity because the matter is confidential and cautioned that preparations were at an early stage.

A deal could value Nucleus at about 1.5 billion pounds ($2 billion), one of the sources said, based on how companies in its sector are valued and Nucleus's recent growth.

Another of the sources said it was too early to discuss possible valuations and that potential buyers would want to see whether Nucleus' technology migration efforts had been successful first.

Spokespeople for HPS and Nucleus declined to comment.

Nucleus runs two retail investment platforms that enable financial advisers to choose fund products for customers. It administers more than 100 billion pounds worth of assets on behalf of 250,000 financial advisers, according to its website.

It has benefited from rising consumer demand for wealth management in recent years and a wave of consolidation among Britain's fragmented financial advisory market.

The company's core profit - or earnings before interest, tax, depreciation and amortisation (EBITDA) - rose 48% to 70.7 million pounds in 2023, the most recent year for which figures are available, according to Companies House filings. Revenue increased by 37% to 157.2 million pounds.

Private equity and wealth technology players are likely to show interest in a sale, two of the sources said.

HPS Investment Partners acquired Nucleus in 2022 when it bought a majority stake from private equity firm Epiris for an undisclosed amount. Epiris retains a minority stake. Epiris declined to comment.

Nucleus acquired pensions provider Curtis Banks in 2023, and investment platform Third Financial in 2024. It also owns a stake in Canadian financial services group Cannacord Genuity.

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