Who owns interactive investor and why is it important?

Interactive Investor or ii as it’s often referred to, is currently owned by the fund management group Abrdn. However, ii can trace its roots back to 1994, it wasn’t until 1995 that the business started to move into equity investing for retail traders, with the appointment of long-term CEO Tomas Carruthers.

Today, Interactive Investor has 400,000 customers and more than £50 billion of their money under administration. Making it one of the UK’s biggest D2C or Direct-to-Consumer investing and trading platforms.

Unlike many of its peers ii has pursued a flat-fee monthly subscription model, with commission rebates. The firm offers GIA, Stocks & Shares ISAs and SIPP accounts, and II clients can trade and invest in more than 40,00 instruments, including stocks and shares, funds, trusts and ETFs.

Interactive Investor’s ownership history

At inception, Interactive Investor was owned by founder Sherry Couto and investors Richard Caruso, John Cooper, and Venture Cap firm Arts Alliance.
The company floated on the London Stock Exchange in February 2000 with a valuation of £550 million.

However, by July 2001 its shares were trading at 25p, having hit a high of 400p in the dotcom bubble.

Australian financial services business AMP, recognised a bargain when they saw one and acquired the business for around £50.00 million.

Then, in 2003, II CEO Tomas Carruthers led a buyout from AMP, backed by the US Private Equity firm JC Flowers. Who retained a controlling stake in the business, until it was sold to Abrdn in 2022, for £1.50 billion.

What does Abrdn do?

Abrdn is a fund manager and adviser with some £506.0 billion of assets under management and a global footprint with 25 offices around the world.

Abrdn is almost 200 years old, having been formed in 1825. The business has a focus on four key thematic areas which are: Asia, Sustainability, Alternative Investments and UK Savings and Wealth Management.

The importance of being owned by a bigger brand

For much of its existence, Interactive Investors has benefited from the ownership of a larger parent, though those owners weren’t necessarily in the same business as the D2C platform.

However, Abdrn is much more closely aligned to II.

Abdrn has a distribution network among IFAs and money managers, and a suite of funds that it manages and oversees.

Which should enable cross-selling opportunities and other synergies between II and its parent.

II, should also benefit from a larger marketing budget and the 200 years of goodwill and brand recognition which Abrdn has built up.

Though the parent company’s rebranding from its previous name of Aberdeen has been called into question and even mocked in some quarters.

Interactive Investor appears to be doing well under Abdrn’s ownership producing H1 2024 Adjusted Operating Profits of £55.0 million, making it the second largest contributor in the group.

At a post-earnings presentation in August Abrdn outlined three key priorities for II which are:

• Enhancement of the II proposition through the launch of new products and services.
• Increasing customer engagement through the provision of added value.
• Building brand awareness to attract new/additional customers to the business.