Integrated Portfolio Solutions seeks buyer; Berkshire mandated

afr.com:

Integrated Portfolio Solutions, a 14-year-old investment administration platform used by financial advisers and high-net-worth investors, is ready for a new owner.

Street Talk can reveal the company has called in Berkshire Global Advisers to shop the business and its $10.2 billion in funds under administration.

Integrated Portfolio Solutions co-founders Edward Caser (left) and Darryl Johnson (right).  James Alcock

Prospective bidders are being told IPS’s preferred deal would see current owners exit in full, but management is open to receiving a slice of the proceeds in equity for alignment.

IPS offers a technology platform that financial advisers and SMSFs use for portfolio administration, financial reporting, tax reporting and data aggregation.

It can plug into third-party customer relationship management tools via an Application Programming Interface, according to a four-page teaser for the sale – dubbed Project Maverick – obtained by Street Talk.

Readers of this column may recall IPS was shopped as an IPO candidate with a $20 million pre-money valuation in 2021.

The Sydney-headquartered business had $10.2 billion in funds under administration at the end of August and was used by more than 85 financial advisers. It hosted 4279 portfolios, with the average portfolio holding $2.38 million.

While those are some big numbers, IPS plays in an industry segment with wafer-thin margins. The business ended the 2023 financial year with $6.5 million revenue, and naturally the sell-side pitch was heavy on its trajectory of past growth and the big target addressable market ahead.

Between 2017 and 2023, IPS doubled its average portfolio size and went from looking after $1.7 billion to $10.2 billion, which took the revenue from $1.7