Equity Story’s Bold Baker Young Acquisition Set to Quadruple Revenue
Equity Story Group has secured a transformative deal to acquire Baker Young Limited, significantly expanding its wealth advisory footprint and boosting revenue projections by over 400%. Meanwhile, its Growth Fund outperforms benchmarks and a new litigation funding vehicle launches.
- Acquisition of Baker Young Limited with $700m Funds Under Management
- Expected 400%+ revenue increase based on FY24 figures
- Equity Story Growth Fund outperforms All Ords benchmark over 12 months
- New $3m Equity Story Litigation Fund established with 13.8% p.a. returns
- Securities division revenue more than doubled, driven by capital raises
Strategic Acquisition Expands Wealth Advisory Reach
Equity Story Group Ltd (ASX, EQS) has taken a decisive step in its growth strategy by finalising a binding agreement to acquire Baker Young Limited, a well-established Adelaide-based wealth advisory firm. This acquisition, announced post-quarter but the result of months of negotiation, brings over $700 million in Funds Under Management and a robust $4.5 million in audited revenue to Equity Story’s portfolio.
The deal is expected to close formally in late August 2025, slightly later than the initially anticipated 1 August date. Once integrated, this move will catapult Equity Story’s revenue by more than 400% based on Baker Young’s FY24 results, marking a significant leap in scale and service capability.
Fund Performance and New Investment Vehicles
Alongside the acquisition news, Equity Story’s Growth Fund demonstrated resilience and skill, outperforming the All Ordinaries benchmark over the past 12 months by nearly 4 percentage points. The fund’s conservative cash positioning earlier in the year, with up to 75% held in cash, allowed it to navigate global uncertainties effectively, deploying capital selectively into high-conviction ideas as market conditions improved.
In a further diversification of its offerings, Equity Story launched the Equity Story Litigation Fund during the quarter, raising approximately $3 million from sophisticated investors. This fund offers an attractive 13.8% annual interest rate, paid quarterly, plus a potential success coupon, providing members with an alternative investment avenue aligned with the company’s broader wealth management ambitions.
Capital Raising and Revenue Growth
The Securities division saw revenue more than double to $247,000 for the quarter, driven by Equity Story Securities acting as Lead Manager for a $2 million placement for QEM Limited and commissions from litigation funding capital raises. This momentum underscores the company’s growing influence in capital markets and its ability to leverage its network for client benefit.
However, the quarter also saw a dip in membership revenue to $74,531, partly due to management’s focus on the Baker Young acquisition. Operating expenses rose by 18%, reflecting increased staffing and corporate costs associated with the acquisition and expansion efforts.
Financial Position and Outlook
Cash flow from operations remained negative at $412,000 for the quarter, with cash reserves at $175,000. To support the acquisition and ongoing operations, Equity Story secured a $3 million debt facility from Axiis Capital Pty Ltd, expected to be drawn mid-August. The company is also in discussions with strategic investors for further capital raising, signaling proactive financial management amid expansion.
Looking ahead, the acquisition is expected to be earnings accretive and enhance the quality and reach of Equity Story’s wealth management services nationally. The introduction of a profit-share model for Baker Young advisers aims to attract further talent, supporting sustainable growth.
Bottom Line?
Equity Story’s acquisition of Baker Young marks a pivotal growth phase, but integration and capital management will be key to sustaining momentum.
Questions in the middle?
- How smoothly will the integration of Baker Young’s operations and culture proceed?
- What impact will the acquisition have on Equity Story’s cash flow and profitability in the near term?
- Will Equity Story successfully raise additional capital to support its expanded ambitions?
