WT Financial JVs with PE player Merchant | Australian Markets

Three years after setting up store in Australia with a view to offering capital to impartial financial advice companies, Merchant Wealth Partners has entered a three way partnership with WT Financial Group to offer ‘patient capital’ to back growth of advice companies.

Merchant introduced its entry to Australia back in 2022 amid the exit of the key banks from the wealth management space and has now entered into a 50/50 three way partnership with WT Financial Group with the announcement stating it’ll “present ‘patient capital’ and strategic help to entrepreneurial advice companies, significantly these within WTL’s present networks: Wealth Today, Sentry Advice, Synchron Advice, and Millennium3.

The three way partnership entity WTL & MWP Investco Pty Ltd, will do the majority of the investment capital heavy lifting.

The announcement mentioned that not like conventional non-public equity, the three way partnership model could be long-term centered and non-controlling, “giving financial advice practices the autonomy to continue operating independently while receiving backing to expand organically and through acquisitions”.

The three way partnership vehicle will take minority stakes (sometimes 20% to 40%) in what it sees as high potential advice companies serving to them to gain scale by means of capital injections, operational help, and strategic steering.

The announcement mentioned that Merchant can be offering the bulk of the investment capital behind the three way partnership whereas WT Financial will “lead opportunity sourcing, due diligence, and ongoing management”.

It mentioned WT Financial additionally has the option to transform its deal-sourcing charges into equity in Hubcos or choice shares within the Investco and will match Merchant’s capital contributions sooner or later.