How is the value of a firms equity stake in Nucleus calculated, and how does a firm show this on their companys balance sheet?
A typical firm will subscribe for 250,000 ordinary shares in Nucleus IFA Company Limited (NIFAC), which itself owns 44 per cent of Nucleus Financial Group. At a point of ‘exit’ or change of control (when Nucleus is sold or floated) participating firms shareholdings will effectively convert to shares in the group company in direct proportion to the volume of revenue which that firm has generated. The precise mechanism is complex and IFA firms should ensure they have a full appreciation of the NFG Subscription & Shareholder Agreement (and associated documentation) prior to subscribing for shares.
