[1]Curran: investment will accelerate development of the business
The venture capitalists already invested in the UK’s first alternative business structure (ABS) have added one of the country’s largest probate and estate administration providers to their portfolio, Legal Futures can reveal.
Smedvig Capital’s injection of £4m in growth capital into Kings Court Trust (KCT) also marks the first, if long-anticipated, move into the private client market by an outside investor.
Set up in 2002, KCT entered into regulation last year [2] as an ABS regulated by the Council for Licensed Conveyancers – as is Premier Property Lawyers, the conveyancing arm of Smedvig’s existing investment, myhomemove, which became the first ABS on 6 October 2011.
Smedvig will continue to look for investment opportunities in the law, it said, with senior associate Avin Rabheru telling Legal Futures that they would like to back another one within the next year.
He said they had previously investigated personal injury, but had been concerned about the uncertainties in the market, such as the possible increase in the small claims limit. But as it settles down, they may look again.
KCT has invested heavily in systems and processes. It offers fixed fees, an online system for clients to monitor the progress of their cases, and recently invested in the Probate Wizard technology to service ‘DIY’ probate clients.
Chief executive Tom Curran told Legal Futures that the investment would accelerate the development of the business, saying that he wanted KCT to be one of the handful of much larger players likely to emerge in the probate market in the coming years than currently exist.
The Co-operative Legal Services is thought to be the largest probate provider in the country, with KCT among the top five, but it is a highly fragmented market.
Legal Services Board research last year [3] found that nearly half of consumers handled probate and estate administration themselves, and Mr Curran argued that this was often because “historically it was so expensive to use traditional providers”. But he said such consumers could be attracted by the “right range of services at the right sort of prices from businesses and brands they understand”.
Mr Rabheru said probate was a market dominated by small high street firms where there was a way of providing the service in a better way while also taking cost out. He described it as a very stable market that was just opening up, with banks, funeral directors and others looking for an outsourced probate provider.
Smedvig had briefly looked at ‘traditional’ law firms but he said they were too generalist, and they did not have the channels to market, technology and processes to make them a viable investment.
Smedvig CEO Johnny Hewett added: “We have been actively working to identify specialist legal services firms with substantial growth potential. Our starting point is always to back strong teams who put customer service at the heart of what they do and when we started looking at the probate market, Kings Court Trust immediately stood out.”
Since launching in 1996, Smedvig Capital has invested over £500m of internal capital. It seeks to invest £2m-10m in fast-growing businesses that have the potential to become market leaders.
The investment will not be shared by KCT’s sister company, probate genealogy business Title Research.