Nucleus: Rights issue will not alter ownership

Nucleus CEO David Ferguson has stressed the wrap’s ownership structure will remain unchanged after its rights issue which is progressing ahead of schedule.

Ferguson revealed the IFA-owned wrap has previously explored different ownership models but says its ownership will remain unchanged after its £15m rights issue, with Sanlam UK still holding a 42% stake in the business.

"There was a point when we explored different ownership models and pretty much took a blank sheet of paper approach," he says. "But the outcome we decided upon will be the same as it is now and after the rights issue our ownership will be exactly the same."

The rights issue, undertaken to refinance debt accumulated at start-up, is being financed by existing shareholders and IFAs who will maintain their proportionate stakes. Ferguson says the fund-raising initiative will be completed by mid-December.

He adds any suggestion Sanlam UK will own a majority stake in the business following the debt-restructuring exercise is "ill-informed."

However, he adds in the long term Nucleus might adopt a different model.

"In ten years time, it is probably unlikely Nucleus will have the same ownership because some members and managers might want to sell."

Last week Skandia said some platforms, such as those "willing to give away shares to advisers", could be looking at their exit strategies and warned advisers these outfits have uncertain future business models.

But the Nucleus chief says all companies are subject to structural change and the idea any firm will keep its ownership model intact long term is "stupid".

Skandia also said the leading platform players in the future will be owned by large-scale organisations with financial muscle, with smaller platform operators possibly seeking mergers, pursuing stock market flotations or closing to new business.

"To suggest smaller companies are somehow more vulnerable is laughable," adds Ferguson. "I expect the legacy platforms to become relatively smaller - the growth in the market is clearly coming from unbundled propositions."

Elsewhere, Ferguson says he is considering expanding the wrap's white label business to discretionary managers and reveals he is holding ongoing discussions with various parties.

"We currently white label to Paradigm but we might expand this into other sectors. For lots of discretionary managers and stockbrokers, it will be more economical to outsource work to us."

Meanwhile, five more IFA firms are set to join the IFA-owned wrap before the end of the year, bringing the number of member firms close to 90.

"We are growing quickly and people really believe in us and believe we are here for the long term," says Ferguson.

He adds the wrap achieved £50m of inflows in the first seven working days of November - more than it did for the whole of March 2009.

Last month, Nucleus passed the £2bn AUM mark.