InvestSMART to sell Intelligent Investor business for $16 million

InvestSMART divests Intelligent Investor to sharpen strategic focus

InvestSMART Group Limited (ASX:INV) has inked a binding term sheet to sell its Intelligent Investor business, including the management rights to four ASX-listed ETFs, to Teaminvest Private Group Limited (ASX:TIP) for a $16 million cash consideration, adjusted for prepaid subscriptions and liabilities. The move marks a significant pivot for InvestSMART, which plans to refocus on its proprietary digital wealth platform, advice services, and Professionally Managed Accounts (PMAs).

The Intelligent Investor business, boasting approximately 272,000 free and 7,000 paid subscribers with an average revenue per user around $660, manages $280 million in funds under management across four ETFs: Select Value Share Fund (IISV), Equity Growth Fund (IIGF), Ethical Share Fund (INES), and Australian Equity Income Fund (INIF). Forecasts for FY26 suggest combined revenue near $7.45 million and EBIT between $2.7 million and $2.9 million, highlighting a steady, subscription-driven revenue base.

Deal terms and strategic implications for InvestSMART

Under the agreement, InvestSMART will transfer all assets necessary to operate Intelligent Investor’s subscription and ETF businesses, including intellectual property, employees, and contributor agreements, while retaining ownership and management of its PMAs and the responsible entity InvestSMART Funds Management Limited. The $16 million consideration notably exceeds InvestSMART’s current market capitalisation, providing a capital boost to pursue organic growth and strategic acquisitions in the financial advice space.

This divestment aligns with InvestSMART’s recent trajectory, following its reported funds under management fluctuating around $712 million amid market pressures and subscriber growth, as detailed in the company’s prior updates. By shedding Intelligent Investor, InvestSMART signals a sharper focus on its digital advice platform and technology tools aimed at do-it-yourself investors, potentially leveraging its improved balance sheet to expand its footprint in the advice market.

TIP’s acquisition enhances retail value investing presence

For TIP, the acquisition complements its existing wholesale funds management, education, and advisory services by adding a retail-facing brand with a strong heritage in value investing. TIP intends to position Intelligent Investor as its primary direct-to-consumer retail brand, maintaining its distinct identity to preserve trust and minimise cannibalisation of TIP’s existing wholesale and institutional offerings.

TIP CEO Andrew Coleman emphasised Intelligent Investor’s long-standing reputation and research-driven approach, expressing confidence that the acquisition will expand TIP’s retail distribution and deepen its analytical capabilities. The deal is expected to be accretive and strategically synergistic, reinforcing TIP’s mission to compound knowledge and wealth through proprietary insights.

Conditions and outlook for completion

The transaction remains subject to several conditions, including due diligence, financing, regulatory approvals, and both InvestSMART and TIP shareholder endorsements. InvestSMART has stated confidence in closing the deal but acknowledges the conditional nature of the agreement. If completed, the sale will reshape InvestSMART’s business focus and enhance TIP’s retail engagement.

InvestSMART CEO Ron Hodge reflected on Intelligent Investor’s legacy since 1999 and the strategic rationale behind the sale, highlighting the opportunity to concentrate on growing its wealth advice business and digital tools. The move follows InvestSMART’s recent funds under management slide to $712m and builds on its strategic capital management efforts, including an ongoing on-market buy-back of shares to optimise shareholder value.