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IPE special report May 2018

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MLP takes control of FERI Finance

GERMANY - Independent financial advisor MLP has taken a controlling stake in Feri Finance, the holding company of German investment consultant Feri Institutional Advisors (FIA).

MLP said that it has paid €64.4m in cash to take a 56.6% stake in Feri Finance. This includes a sizeable stake held by Germany's Quandt family - one of the richest in Germany.

MLP's move was partially expected. In late May, MLP announced that it would deepen its 12-year business relationship with Feri Finance and consider taking a stake in the firm. Feri Finance develops investment products that MLP distributes to both private and institutional clients in Germany.

In early 2005, Heidelberg-based MLP decided to make pension products one of its core businesses. By 2010, the IFA aims to double its share of the occupational pensions sales market to 8%.

MLP also said that as part of today's deal, it had gained the option to lift its shareholding to 100% by 2011.

It valued the remaining 43.4% stake - held by partners in Feri Finance - at a minimum of €47.7m, adding that the ultimate price may be higher depending on the future performance of the business.

MLP further stressed that the transaction would not impact on Feri Finance's strategy. "Feri Finance will continue its successful business model and advise clients on an independent basis," the IFA said.

Beyond FIA, the holding Feri Finance comprises Feri Wealth Management and Feri Rating & Research. The holding, based in the Frankfurt suburb of Bad Homburg, has 180 employees and sales of €35m.

Since 2003, FIA has been hit by an exodus of senior managers and other staff. Most notable are four managers who went to found rival Frankfurt consultant Faros; Torsten Köpke, who joined Watson Wyatt in the summer of 2005; and this month, Hartmut Leser, FIA's best-known consultant among German institutional clients.

But FIA insists that between new hires and restructuring, it has been able to cope with the exodus. Just in late August, it expanded the number of its managing directors to seven from four. All report to Arnd Thorn, FIA chief executive who joined around the time Köpke left.

FIA also says that despite the staff turnover, it has not lost one of its institutional clients. Those clients have been €250bn and €270bn in assets, the consultant says.

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