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Small cap star Giles Hargreave's firm sells to Canada's Canaccord

Hargreave Hale, home to legendary smaller company investor Giles Hargreave, has been bought by Canaccord Genuity for £80 million.

 
Small cap star Giles Hargreave's firm sells to Canada's Canaccord

Canada's Canaccord Genuity Group has swooped on Hargreave Hale and bought the independent stock broking and fund manager in a deal worth up to £79.5 million. 

Hargreave Hale chairman and top UK small company fund manager Giles Hargreave (pictured), will remain with the business, along with the wider fund management and investment team. 

Canaccord will add Hargreave Hale to its growing wealth management operations in the UK. It will pay an initial £52 million and an additional consideration of £27.5 million dependent on certain performance targets being met over three years. The deal will be part funded by a £40 million loan from National Westminster Bank and HSBC.   

Citywire AA-rated Hargreave is one of the UK's most respected small company investors. He runs a range of funds, including his flagship Marlborough Special Situations fund, which has returned 204% over the 10 years to May versus a sector average of 115%, as well as the UK Micro Cap Growth and Nano-Cap Growth funds focusing on some of the stock market's smallest companies.

Hargreave, who owns 3.6% of the business, said in a statement: 'With its similar business model, shared culture and common values, Canaccord Genuity Wealth Management in the UK represents the ideal partner to continue the successful growth and development of our business.

'Along with our senior management team, I look forward to working with our new colleagues as we continue to deliver excellent investment and wealth management services for our clients.' 

Canaccord Genuity Wealth Management (CGWM) chief executive David Esfanid said he was very impressed by the quality and calibre of people at Hargreave Hale. 'We are committed to investing in and accelerating the growth of Hargreave Hale’s fund management and private client wealth management operations for the benefit of the clients, staff and shareholders of both firm,' he said. 

Hargreave Hale traces its roots back to 1897. It offers wealth and fund management services, alongside stockbroking services to around 14,000 private clients, intermediaries, corporations and charities. After a recent expansion it has nine offices located in Bangor, Blackpool, Carlisle, Lancaster, London, Norwich, Nottingham, Worcester and York.

It has £8 billion of assets under management, which will boost those of the Canaccord wealth division to £22 billion. For the 12 months to the end of March, the firm reported total revenue of £48 million and net income of £4.4 million.  

'The acquisition of Hargreave Hale is an important step in our strategy of building a leading independent global wealth management business,' said Dan Daviau, president and CEO of the Toronto-listed Canaccord.  

The deal remains subject to approval from the regulator and Hargreave Hale shareholders. They include Investec, which owns a 31.9% stake alongside joint managing director Stuart Brookes who owns 3.3%.  

The acquisition marks Canaccord's first major foray into the wealth market since it bought Collins Stewart Hawkpoint for £253 million in 2011 and topped this up with the £13 million acquisition of the wealth management business of Eden Financial in 2012.

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