Class makes managed accounts play

Class is investing $4 million in an MDA service provider, with an option to take full ownership of the company down the track.

Investing in Philo Capital Advisers, Class will provide software to support the company's offering, including services to licensees using BT Panorama.

The investment is via convertible notes which are expected to convert into equity based on a growth-related valuation. The equity ownership can increase to 100% in the longer term.

Philo's senior management team will remain as shareholders over the medium term, with Class saying they are incentivised to grow the business.

An initial tranche of $1.5 million has been invested, with a further $2.5 million to be added by the end of the month. It is not expected to have a material impact on Class' FY19 or FY20 earnings.

Class said the partnership is an important strategic step for the SMSF software provider as it moves into the broader wealth management space.

"Class and Philo are well aligned, both delivering highly differentiated services that enable client firms to provide better business and investor outcomes," Class strategic alliances director Glenn Poynton said.

Also commenting, Philo director principal Brett Sanders said: "The investment by, and our collaboration with Class, will significantly accelerate growth to make Philo an even more attractive partner to advice groups, platforms, asset consultants and investment managers."

Philo was established in 2012 and has contributed to the managed account offerings of Centric Wealth, Shadforth Financial Group and IOOF.

Read more: ClassPhilo Capital AdvisersBrett SandersBT PanoramaCentric WealthGlenn PoyntonIOOFShadforth Financial Group
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