Wealth Carve-Out & Buyout Modeler

Deal Inputs & Capital Structure

1. Target AUM & Revenue Economics

AUM Base (£B) Average Fee Margin (bps)

EBITDA Margin 28.5% Annual AUM Organic Growth

Carve-Out Advisor Churn Haircut 5.0% Expected day-one client/advisor attrition during ownership transition

2. Entry Valuation

Valuation Method Entry Multiple

3. Leverage & Debt Financing

Senior Debt (x EBITDA) Blended Debt Cost (% p.a.)

4. Consortium Equity Allocation

Lead PE 1 (%) Co-Lead PE 2 (%) Mgmt MIP (%)

5. 5-Year Exit Assumptions

Exit EBITDA Multiple FCF Cash Sweep to Debt

Implied Enterprise Value

£781M

2.23% of effective AUM

Sponsor Equity Check

£535M

68.5% Equity / 31.5% Debt

Consortium 5-Yr Net IRR

21.8%

Exceeds 20% Hurdle

5-Yr Money-on-Invested (MoIC)

2.68x

Net Sponsor Proceeds

Consortium Equity Stake & Cash Flows Partner Check Sizes

PE 1: 47.5%

PE 2: 47.5%

MIP 5%

CD&R: £254M

Warburg Pincus: £254M

Management MIP: £27M

Day-1 Run-rate Net Revenue: £192.9M

Pro-Forma Entry EBITDA: £55.0M

Opening Term Debt (Senior): £233.7M

Year 5 Proj. Net Debt: £82.4M

5-Year Value Creation Bridge (Exit EV) Y5 Exit EV: £1,180M

Returns Sensitivity: Exit Multiple vs. AUM Organic Growth Target Sponsor IRR (%)

Compelling Carve-Out Profile

Healthy cash generation with rapid senior deleveraging supports double-digit equity compounding even under 100 bps fee compression.

Net Debt / EBITDA at Exit

0.9x

All parameters recalculated in real-time.

Export Model (.JSON)

Consortium Structuring & Governance

Joint private equity ownership (such as CD&R and Warburg Pincus bidding for Canaccord Wealth) splits large equity checks, diversifies execution risk, and brings shared regulatory capital. Shareholder agreements stipulate reserved matters, tag-along/drag-along rights, and dead-lock arbitration.

Carve-Out Transition & Haircut Risk

Disentangling wealth management divisions requires shared custody migrations, compliance novation, and retaining key discretionary portfolio managers. Standard financial models bake in an immediate 3% to 10% AUM attrition buffer to stress-test earnings fragility.

Fee-on-AUM Compounding Economics

Wealth management features sticky, recurring revenues with high FCF conversion. Because capital expenditure is minimal, free cash flow is heavily directed toward debt paydown, accelerating equity returns without requiring excessive multiple expansion.