GDG confirms purchase of Evidentia – Financial Management

Generation Development Group (GDG) has officially announced its acquisition of Evidentia Group, marking a significant move in the funds management sector. This acquisition will bring together two key players in the industry to create a powerhouse managed account provider with more than $25 billion in funds under management (FUM). Evidentia, established in January 2020, specializes in providing tailored Separately Managed Account (SMA) portfolios and investment management services to private wealth firms and currently manages $12.7 billion in FUM.

GDG highlighted in an ASX statement that the merger will result in a leading end-to-end investment management and managed account solution for licensees, financial advisers, and their clients. The two entities have minimal overlap in client bases, product offerings, and target markets, making them a complementary fit for each other. The upfront consideration for this acquisition amounts to $320 million, along with a potential earn-out of up to $40 million if the combined Evidentia and Lonsec managed account business can achieve a year-on-year revenue growth of 46% by FY26.

Peter Smith, the current CEO of Evidentia, will continue in a leadership role post-acquisition and is set to become the executive chairman, holding a position on the GDG board of directors. GDG envisions operating as three distinct businesses in the future – Generation Life, Lonsec Research, and Evidential Group. The managed account market is projected to expand by 15% annually, reaching $474 billion by 2030. This acquisition is anticipated to be finalized in February 2025, streamlining operations and enhancing service offerings for clients.

Grant Hackett, the CEO of GDG, expressed his enthusiasm for the transaction, viewing it as a pivotal step in the company’s growth strategy. Hackett referenced the successful acquisition of the remaining equity interests in Lonsec in 2024 and emphasized the strategic significance of bringing Evidentia into the fold. Since its inception in 2020, Evidentia has emerged as a leading player in the dynamic managed accounts market due to its boutique managed account solutions, client communications expertise, and financial advice practices. This acquisition represents a strategic growth opportunity for GDG, leveraging the unique strengths and offerings of both Evidentia and Lonsec Investment Solutions.

Looking ahead, GDG is poised to capitalize on the expanding managed account sector, positioning itself for sustained growth and market leadership. With a robust portfolio of services and a strong leadership team in place, the combined entity is well-positioned to meet the evolving needs of clients and navigate the competitive landscape of the funds management industry. The GDG-Evidentia acquisition marks a significant milestone in the company’s journey towards becoming a formidable force in the managed accounts space, driven by innovation, excellence, and client-centric solutions.