AFH Financial Group, the Financial Planning-led wealth manager, is to raise up to £20 million on the stock market through a bond issue to fund future acquisitions and investment.

The rapidly-growing firm bought 16 Financial Planning and IFA firms in 2018 and says the fund-raising will help fund five further acquisitions which are in the pipeline.

Bromsgrove-based AFH, headed by Chartered Financial Planner Alan Hudson, will raise the money through a conditional placing of 4% convertible unsecured loan stock (CULS) 2024.

In a statement the company said today: “Alongside its strategy to drive organic growth, the board intends to continue to execute its strategy of making selective acquisitions within the Financial Planning and Wealth Management sector whilst providing a professional and cost-effective service to its clients.

“The board believes that the company remains well positioned to take advantage of consolidation opportunities in the sector and currently has a strong near-term pipeline, with five potential acquisitions currently at various stages of the due diligence process.

“The company is undertaking the placing to provide it with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes. The company is also currently exploring options to access additional capital, including the use of bank debt, to enhance its ability to undertake value-adding acquisitions and for general corporate purposes.”

The placing is being made to help with long-term structural gearing at a fixed cost, provide additional funds for investment and provide better alignment between bondholders and shareholders as the bonds will be convertible into ordinary shares in the future.

The placing is expected to close on 11 July but may be closed earlier or later at the discretion of the company.