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Cinven to snap up £2bn wealth management platform True Potential

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Cinven, the private equity firm, is close to wrapping up a takeover of True Potential, a wealth management platform which works with a fifth of Britain’s army of financial advisers.

Sky News has learnt that Cinven was on Tuesday night on the verge of signing a deal to take a controlling stake in True Potential following months of on-off talks.

City sources said the takeover was likely to value the business at anywhere between £1.6bn and £2bn – crystallising huge windfalls for its top executives and shareholders.

A public announcement could be made as early as Wednesday, according to insiders.

Even at the upper end of the that range, however, it would still fall short of the £2.5bn valuation which True Potential was understood to have been hoping to secure during discussions with rival bidders – including a special purpose acquisition company set up by Bernard Arnault, one of the world’s richest men.

True Potential, which is headquartered in Newcastle, ran a sale process in 2018 in the hope of drawing bids worth £2bn.

The auction was aborted after failing to attract offers at that level.

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Set up in 2007, True Potential is owned by hundreds of individual partners with a minority stake having also been held by FTV Capital, a US-based private equity firm.

The company is controlled by its founder, David Harrison, who remains at the helm as chairman and owns a paper stake likely to be worth hundreds of millions of pounds.

Mr Harrison previously founded Positive Solutions, which grew into a business representing 1900 IFAs.

True Potential is vertically integrated, meaning it has its own platform and funds.

Last year, the company reported turnover of £185m and earnings before interest, tax, depreciation and amortisation of £74m, up 59% on the previous year.

Credit Suisse is advising True Potential on the talks, while Cinven is working with Fenchurch Advisory Partners.

True Potential and Cinven both declined to comment.