IG Group Holdings acquires Freetrade for £160 million

LONDON: IG Group Holdings plc has announced the acquisition of Freetrade, a fast-growing, commission-free, self-directed investment platform, for £160 million.

This acquisition aims to strengthen IG’s UK trading and investments offerings and provide access to new customer segments and capabilities.

Breon Corcoran, CEO of IG, stated that this acquisition presents a rare opportunity to enhance IG’s UK trading and investments offerings and broaden their target market.

“Freetrade is one of the most successful emerging players in the UK direct-to-customer investment market, with a strong brand, highly scalable technology, and rapid growth. I am delighted that Viktor and his team will join IG and continue to lead Freetrade,” Corcoran said.

Viktor Nebehaj, CEO and co-founder of Freetrade, expressed his excitement about the opportunity to accelerate growth and deliver new products and features on their platform. “IG’s vision for Freetrade is closely aligned with our own and its backing will be of huge benefit as we continue to scale the business,” Nebehaj commented.

The acquisition is expected to enhance IG’s UK trading and investments proposition. Freetrade offers a wide range of products, including global stocks and ETFs, fractional shares, UK Treasury bills, ISAs, SIPPs, securities lending, and proxy voting. Its user-friendly platform and transparent pricing have driven strong client acquisition and growth.

Since its launch in 2018, Freetrade has grown rapidly, with 720,000 customers and assets under administration (AUA) of £2.5 billion as of the end of 2024. The platform has shown strong growth momentum, with net flows in 2024 equivalent to 22% of starting AUA. In 2024, revenue increased by 32% year-on-year to £27.5 million.

IG plans to operate Freetrade as a standalone business with its own brand and existing management team. The focus will be on expanding Freetrade’s product range, hiring talent, adding new features, and increasing marketing activity to accelerate growth.

IG will acquire 100% of Freetrade for an enterprise value of £160 million, funded in cash from existing capital resources. The completion of the transaction is subject to regulatory approvals and is expected to occur in mid-2025.

The acquisition is anticipated to achieve a return on invested capital in excess of IG’s weighted average cost of capital within three to five years. IG reported surplus regulatory capital of £638 million as of 31 May 2024 and expects to maintain strong capital headroom following the acquisition. Surplus capital not required for other priorities will be returned to shareholders, with an extension of the existing share buyback program expected in the second half of the current financial year, subject to regulatory approval.

IG Group Holdings appoints Breon Corcoran as Chief Executive Officer