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The billionaire co-founder of Hargreaves Lansdown is returning to the investment platform’s group board following its private equity takeover, a decade after he stepped down as a director.
Peter Hargreaves, who helped set up what is now the UK’s largest retail investing site in 1981, has nominated himself for the non-executive role and put his son Robert forward to become a board observer, according to people familiar with the matter.
The move signals a step-up in Hargreaves’ involvement with the retail investment company following its £5.4bn sale to a group of private equity firms including CVC Capital Partners. It comes after he castigated the group’s previous management as presiding over a “shambles” that halved the share price.
Hargreaves is expected to assume the director role on the group board within weeks, one of the people familiar with the move said. Robert, who previously worked for Hargreaves Lansdown, will be able to attend meetings, although observers do not have voting rights, the people close to the situation said.
Hargreaves retained a stake of about 10 per cent after selling half of his 20 per cent holding in the takeover, netting him more than £500mn. As a result of his remaining substantial stake in the company, which floated in 2007, Hargreaves has the right to nominate a board director and an observer.
Stephen Lansdown, Hargreaves Lansdown’s co-founder, opted to sell his entire near-6 per cent holding in the sale to private equity. He told the Financial Times at the time that it was “a bittersweet moment for me personally but I feel it is the right time to part company with Hargreaves Lansdown and concentrate on other projects”.
Hargreaves Lansdown pioneered selling stocks and funds directly to retail investors when it launched more than four decades ago, allowing customers to bypass financial advisers.
But the takeover by CVC, Nordic Capital and Platinum Ivy, a wholly owned subsidiary of the Abu Dhabi Investment Authority, followed a difficult few years in which customer inflows slowed, costs rose and the share price fell from a peak of £24 to £7. The private equity firms paid £11.40 a share.
Hargreaves Lansdown had floated at 160p a share, giving it a value of £759mn. Peter Hargreaves stepped down from his non-executive board role in 2015, just five years after he relinquished his role as chief executive.
As a result of the acquisition, Hargreaves Lansdown’s board tendered their resignation at the end of last month. Bruce Hemphill, former chief executive of financial services group Old Mutual, was appointed as chair of the group board. Other directors include Peter Rutland, a managing partner at CVC.
One analyst said that under private ownership, it would be easier for Hargreaves Lansdown to cut fees charged to customers, noting that the investment platform is more expensive than rivals in some cases.
Nordic Capital, a member of the consortium, previously invested in Nordnet, a similar digital investment site. Nordic Capital took the business private in 2016 and then relisted it in 2020. During its time under private ownership, Nordic invested about €100mn into Nordnet’s technology as well as its digital services for clients.
Hargreaves Lansdown declined to comment. Peter Hargreaves said he was “pleased so many clients have remained faithful” and would be “endeavouring to reward that faith£ by constantly improving the company.
