Tanarra ‘supporting Bain’s Insignia Financial tilt’

Tanarra Capital’s John Wylie. Picture: Stuart McEvoy

John Wylie’s Tanarra Capital is quietly backing Bain Capital’s bid for Insignia Financial behind the scenes, say sources.

And there are suggestions that the former star banker may himself have even helped to stich up the approach from the Boston-based private equity fund.

Tanarra, with 14 per cent, will be kingmaker in any buyout involving Insignia Financial, having tripled its holding since late 2022.

In 2022, Insignia’s share price ranged from $3.43 to $3.80 and it has been trading at lower levels ever since.

If he sells at Bain’s $4-per-share offer price, he walks away with a profit on his investment – something Tanarra will want to crystalise after the poor performance of healthcare company Healius, of which Tanarra is also a major shareholder.

Before Bain Capital’s $2.7bn bid, other private equity firms circled the Australian-listed wealth manager that administers $319.6bn of funds.

One of the names mentioned was CC Capital, where Insignia Financial boss Scott Hartley previously worked when NAB had its wealth manager, MLC, on the market.

Insignia purchased MLC from NAB for $1.4bn in 2020.

Apparently, the chatter is that Mr Hartley was keen for the private equity firm to buy AMP when he worked at CC Capital.

The latest Bain Capital offer implies 11 times forecast annual net profit when its shares have been trading at about nine times.

Analysts at Morgan Stanley said the bid also places it at similar trading multiples as AMP, but the latter offers a stronger balance sheet, better flows and a proven cost-out story.

It believes that several platform integrations elevates the outflow risk, placing pressure on free cashflows.

The dividend is on hold, and its gearing is stretched, and while the new management’s strategy refresh offers promise into the 2028 financial year, there are no stepping stones to track cost progress, Morgan Stanley said.