Bain Capital drafts in former Insignia Financial boss Renato Mota to boost its takeover tilt

The three-way private equity takeover battle for Insignia is heating up with Bain tapping a former boss of the ASX-listed wealth group to help give it a competitive edge.

Former Insignia CEO Renato Mota has emerged in Bain Capital’s camp as it vies to buy the wealth company. Picture: Stuart McEvoy/The Australian.

Bain Capital kicked off the bidding war for MLC-owner Insignia Financial and has certainly pulled out all the stops to assemble an experienced team to assist it in winning the $3.1bn contest.

This column understands the Bain camp quietly drafted in former Insignia chief executive Renato Mota in an advisory capacity earlier this year to assist in a tilt for the wealth company. His involvement came after Bain’s initial bid was lobbed on December 12 and as the private equity firm also has former MLC boss and ex-Perpetual CEO Geoff Lloyd in its corner.

Bain is obviously going to great lengths to understand the intricacies of Insignia’s operations and get an edge, before deciding whether to forge ahead with a binding offer. Insignia has almost $327bn in funds under management and administration and houses some 200 salaried financial advisers. Its divisions span wrap platforms, asset management, financial advice and master trust.

After buying MLC from National Australia Bank in 2020,Insignia only completed the separation of systems and technology in November. Under Mota, the wealth company also bedded down the purchases of ANZ’s pensions and investments unit and its licensee business.

There are now three private equity firms going head-to-head with indicative, or non-binding bids, of $3.1bn for Insignia. And whichever way the tussle goes, the next few weeks will prove critical to the future ownership of Insignia.

Mota knows Insignia intimately having worked at the company, formerly called IOOF, for more than 20 years including almost five as CEO. He left Insignia around this time in 2024 after a turbulent few years, including the integration of several acquisitions and a period of controversy and remediation following the Hayne royal commission. John Wylie’s Tanarra Group played a role in agitating for his departure from the company.

Having both Mota and Llyod helping Bain in the tent running the numbers and rationale for the bid, shows the firm is gunning hard for Insignia. The duo will also aid in getting behind the numbers and asking the tough questions of the wealth group’s management and its advisers.

Bain and rival CC Capital are well and truly on their way in the Insignia due diligence process, having already participated in management presentations. Investment behemoth Brookfield – which entered the bidding fray last week at the same $4.60 per share level - will seek to get up to speed quickly too.

But with some shareholders talking about value in the target’s shares at $5, that level may be shaping up as a key threshold in the takeover tussle.

If all goes to plan, Insignia’s Allan Griffiths-led board and its respective advisers will closely scrutinise and binding bids, with price, financing and conditionality proving key metrics in any assessment.

Much will also depend on what substantial shareholders, of which Tanarra is the biggest, make of any binding bids that emerge late this month or early March. Separately, First Sentier on Friday told the ASX its stake had ratcheted up to 7.6 per cent, from 6.1 per cent.

Insignia reports its interim earnings on February 20 which is the group’s next detailed update, following a quarterly business update delivered last month. CEO Scott Hartley used the update to stress the momentum showed Insignia was well placed to deliver on its 2030 strategy.

On the flip side, Insignia is currently being targeted by scammers. The timing is terrible given the wealth group has become aware of scam activity and individuals being targeted by unscrupulous operators through unsolicited telephone calls and emails.

Insignia Financial CEO Scott Hartley. Photograph by Arsineh Houspian.

Back to the subject of private equity connections in the Insignia bidding contest, Hartley was working under the radar with the New York-based CC Capital in 2020, when it was bidding for MLC. Insignia - then called IOOF - won that auction snapping up MLC for $1.4bn.

Insignia’s board has, however, considered the issue of a potential conflict and remains comfortable with Hartley’s participation in current bid deliberations.

The takeover battle has all the ingredients, including global private equity firms potentially fighting it out, while Mota and Lloyd work furiously for Bain and CC Capital potentially backs Hartley’s turnaround plan.

Brookfield has looked at combining Insignia with its non-bank lender La Trobe Financial, as a way of expanding the latter’s credit fund into other areas of wealth.

The other asset within the investment house’s portfolio that would have synergies with Insignia is Brookfield Wealth Solutions, a provider of retirement services and wealth protection products.

Investors also need to be mindful that any transaction to acquire Insignia will require requisite approvals from the Foreign Investment Review Board and Australian Prudential Regulation Authority.

Colonial First State was the first domestic superannuation player to have a majority private equity owner in this market. KKR acquired a majority stake in Colonial from Commonwealth Bank in late 2021.

That process was a protracted one – taking about 18 months - as the APRA ran a fine tooth comb over the acquisition.