Sequoia gains major shareholder seeking to benefit from M&A
Sequoia has gained a new shareholder after the Australian Wealth Advisors Group (AWAG) took a substantial stake, with AWAG chair Lee Iafrate saying he believes the advice licensee’s shares are trading at a deep discount.
According to filings, Melbourne-based AWAG now holds enough shares to give it 18.2 per cent voting power in the firm, making it a substantial shareholder in the licensee.
Iafrate said the firm saw an opportunity to pick up the shares at a deep discount after a difficult 2024 for Sequoia and is hoping for the share price to rise.
Shares in Sequoia have fallen 16 per cent over the past year after the firm experienced a shareholder rout and a court action regarding Informed Investor. The Informed Investor action against its managing director Tim McGowen was resolved in August 2024 and Sequoia later divested it to Powerhouse Ventures the following month.
Meanwhile, the shareholder action which sought to bring in two new board members in Peter Brook and Brent Jones to replace managing director Garry Crole and director Kevin Pattison was narrowly defeated at a extraordinary general meeting in June. While the motion failed to pass, Sequoia committed to making changes and cutting 10 per cent headcount at the firm.
The firm said it will move from having four reporting divisions to having two for FY2024–25; the new divisions will be licensee and adviser services, and legal and administration services.
Iafrate said: “This was an opportunity to buy shares at a deep discount to fair value. It was trading at an unrealistic discount after the corporate activity, and we see it as a re-rating opportunity.
“There is good potential for further rationalisation and corporate activity in financial advice, and we believe Sequoia is integral to this and we want to be an active participant in that.”
This recent M&A activity includes the bids for Insignia from private equity firms Bain Capital and CC Capital and the sale of AMP's advice sale to Entireti and AZ NGA.
“The future looks good for the industry. There is lots of corporate interest in Australia from overseas players, and I could see a lot of activity happening over the next 3–6 months.”
Among the decisions made following the EGM was the decision by Crole to step down by 30 June 2026, a move that was welcomed by Iafrate. This would see the board focus on succession planning for his replacement and for Crole to act as a mentor for a smooth transition.
“Nobody wins in these scenarios. The company was tearing itself apart from within. The statement by Crole gives clarity and demonstrates leadership and forward direction for the firm," he said.
Referencing how he plans to improve the firm’s share price, Crole told Money Management: “Sequoia management is continuing to build its business of providing services to the advice community and generate returns for its loyal shareholders and advisers.”
He previously detailed at the firm’s annual general meeting in November that the licensee is focusing on multiple key strategic initiatives for the year ahead, including:
- Continuing to invest in technology that will drive greater efficiency.
- Restructure the Sequoia Specialist Investments/media businesses to grow revenue.
- Using its strong balance sheet to focus on growth initiatives.
- Increasing market share organically in licensee services.
- Increasing market share in legal and administration services business.
AUTHOR
Laura Dew
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