A successful value creation and realisation story

Snowball is one of Australia’s most successful wealth management “start-up” to “succession” stories.  Tony McDonald and Carl Scarcella were among the co-founders and the nucleus of the foundation management team.  Value was created and ultimately realised.

Founded in 2000, Snowball grew to become one of Australia’s leading independent wealth management businesses.  It was listed on the ASX and provided an integrated service encompassing financial advice, accounting and tax, portfolio management, and portfolio administration.

Strategy

Profitable growth was achieved by relentless pursuit of a strategic plan and the effective management and motivation of people.  A logical strategic step for both value creation and value realisation for shareholders was the merger of the business with the Shadforth Group to become SFG Australia in 2011.  The merger of Snowball with Shadforth led to a wealth management business with a market capitalisation of around $450 million, and created enhanced value as well as liquidity for Snowball shareholders.

Value creation through organic and inorganic growth

From a standing start, Snowball grew to become a sustainable and robust business with:

  • $4.7 billion of funds under advice
  • $1.9 billion of funds under administration, utilising an innovative “private label” platform that was ahead of its time
  • $0.7 billion of funds under management via an internal specialist funds management business, with additional FUM in “model portfolios”
  • A dual advisor and brand structure (the Outlook brand with employed advisors and the Western Pacific brand comprising “franchised” advisors).  Both groups of advisors participated in equity schemes
  • Revenues of $40 million and EBITDA of around $13.5 million.

Growth was achieved both organically and through M&A.  The team completed and successfully integrated over twenty acquisitions between 2000 and 2011, including tuck-ins, the acquisition of a funds management business and the revenue rights to a proprietary portfolio administration platform, culminating in the transformational merger with Shadforth to create enhanced liquidity.

Through this experience, Tony and Carl have built up in-depth knowledge in growth strategies, business succession, valuation methodology and transaction structuring and negotiation.

Infrastructure and governance expertise

Snowball was vertically integrated from the outset participating in all parts of the value chain including advice, portfolio administration and portfolio management.  Robust portfolio administration and investment solutions supported the advice proposition, including an MDA offering fully integrated with a cost-effective platform.

Detailed business information, reporting and governance frameworks were in place, of a standard that met public company standards.  Regular commercial reviews were conducted to identify value enhancement opportunities, while better managing the operational and commercial risks.

People and culture

Snowball had a unique culture, based on four core values that laid the foundation for its growth and which spoke to a strong customer-focus and respectful engagement with all stakeholders.  To this day, strong links are maintained among the Snowball diaspora and the Snowball story is one that many people contributed to and of which they remain proud.