Interactive Investor

Private Equity Manager (GP)

Case study

About the company

Interactive Investor is the second largest direct-to-consumer online wealth management platform in the UK. It operates an investment and trading platform that provides retail investors with financial information, tools and a trading environment in which they can make investment decisions. This award-winning platform puts customers in control of their financial futures.

Investment rationale

The acquisition provided access to a high-growth direct investment market, a scalable business platform that could be expanded rapidly through acquisitions and a combined technological platform that meets clients’ financial needs at different stages of their lives. The business model has stable and high recurring revenues based on a flat-fee monthly subscription model. J. C. Flowers (“JCF”) acquired the company from a very motivated seller, with a plan to (i) consolidate existing customers across business units (a cross-selling opportunity) and (ii) implement a data/technology transformation (combined with improved pricing/brand management strategy).

Our relationship

Pantheon has been an investor in J. C. Flowers’ funds since 2016 via multiple secondary transactions.

Active management and value creation

• Under JCF’s ownership, interactive investor had a strong track record of acquiring and integrating complementary platforms. Interactive investor completed the acquisitions of TD Direct Investing in 2017, Alliance Trust Savings in 2019, and Share plc in 2020. The latest acquisition was the EQi book of customers, which completed in June 2021.
• In addition, the company was able to execute on their technology transformation initiative, making operations more efficient and driving a market leading user experience. Together, these all translated into high growth via the business’s scalable infrastructure and brand leadership, which JCF helped to cultivate.
• From June 2017 to May 2023, J.C. Flowers grew interactive investor’s assets under administration from approximately c. £21bn to £55bn through a suitable mix of organic growth and strategic M&A. This was the equivalent to an annualised growth rate of c.17% over the six year holding period.

Exit

Interactive Investor was acquired by abrdn plc, a UK-based asset manager, in May 2023.