Tavistock Investments has announced it has entered into a strategic agreement with Lighthouse Group to establish an investment management service to develop and distribute products and services under the Luceo brand.
Luceo is Lighthouse's current proprietary range of investment solutions which already caters for an adviser base, to which Tavistock will promote its recently launched capital protection products and model portfolio service.
Tavistock has also announced it intends to raise up to £1.25m of additional working capital before costs, through issuing up to 38,109,756 new ordinary shares of 1p each at a subscription price of 3.28p per share.
If successful, the fundraise will allow the group to replace its existing debt facility with a new £2m five-year facility from NatWest Bank at a lower rate of interest, potentially saving Tavistock some £100,000 per year in interest.
Lighthouse Group currently has £5bn assets under advice and places about £1bn of new investment and pension fund investments on behalf of its clients each year.
Commenting on the new joint venture, Tavistock's CEO Brian Raven said: "The establishment of a strategic relationship between Lighthouse and Tavistock is a significant development for both groups. Lighthouse is one of the leading financial advisory businesses in the UK with some 400 advisers.
"It is the preferred supplier of financial advice to 21 affinity group partners and their aggregate membership of more than 6 million individuals. Its selection of Tavistock as its partner to further develop its Luceo range of investment solutions is a strong endorsement of our expertise in this field. We look forward to achieving considerable success together in the coming years."
Malcolm Streatfield, CEO of Lighthouse, added: "Lighthouse is a successful financial advisory business with particular expertise in providing advice to members of its affinity group partners, whose aggregate membership is in excess of 6 million individuals.
"The group signalled its intention to provide effective, risk-managed investment solutions to its customers by launching the Luceo Asset Management Range in October 2016 and is continually looking to extend its range of investment solutions, for the benefit of the group, its customers and shareholders.
"Tavistock has demonstrated its ability to establish an investment management business of scale since its inception in 2014 and I am delighted that we will be working together to develop additional high-quality investment solutions for the benefit of our mutual client bases. I believe that this will be the start of a successful working relationship between Lighthouse and Tavistock."