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M&A frenzy: the biggest deals of the year so far
It's been a busy first quarter of 2013 with the financial services sector roaring into life with mergers and acquisitions being done in all areas of the market. Fund managers bought each other, Sipps consolidated, and L&G finally bought Cofunds. Click through to see all the deals done this quarter…
It’s been on the cards for a while, so when Lloyds Banking Group put a giant ‘for sale’ sign over a 20% stake in restricted advice group St James’s Place, fund managers were ready with their chequebooks.
Star managers Nigel Thomas and Giles Hargreave both jumped at the chance to up their stake, as did Richard Buxton (pictured), in one his last acts before his departure from Schroders to Old Mutual Global Investors was announced.
St James’s who? Lloyds sale of 20% of SJP up was not the bigget deal in town for long as soon Schroders struck a £424 million agreement to buy Cazenove Capital.
The deal will swell Schroders' assets under management by £17.2 billion, bringing it to £229.2 billion. It will add £5.1 billion to Schroders' retail funds business, and take its private banking division to £28.4 billion.
Cazenove Capital chief executive Andrew Ross will take up the role of Schroders head of UK private banking under the deal, reporting to Schroders group head of private banking Philip Mallinckrodt. The Cazenove Capital name will survive across the private banking division acquired.
Yes it had been on the cards for literally years, but one of the most protracted takeovers in financial services finally happened in March this year when Legal & General (L&G) sealed a deal to acquire the Cofunds platform, agreeing on a value of £175 million after months of discussions.
The deal will see L&G pay £131 million in cash for the 75% of Cofunds it does not already own.
News of the provider’s courting of the platform first broke in November 2011, after Legal & General issued a written statement of interest In March last year, New Model Adviser® reported the two were battling over Cofunds’ £250 million asking price, and it is understood that the pricing of the deal has been the focus of talks since then.
Not to be outdone by the likes of L&G Standard Life Wealth acquired Newton Private Clients for up to £83.5 million, in a deal which will triple its assets under management.
Newton's wealth arm has around £3.6 billion of assets.
Standard was reported to have beaten Quilter and Rathbones to the deal which will saw it gain Newton’s 3,000 UK and international clients and a number of charity clients.
Royal London takes the prize for the most protracted acquisition process of all the deals done this quarter, after it finally agreed terms to buy the Co-operative Banking Group’s life insurance business more than 18 months after announcing its plans.
Royal London will pay £219 million for the business, and will see its assets swell from £50 billion to £70 billion as a result.
Suisse on a roll
Credit Suisse enjoyed a busy spurt before the Easter break, announcing the acquisition of Morgan Stanley’s European wealth management arm and the sale of JO Hambro Investment Management with the space of just over 24 hours.
Credit Suisse will acquire £13 billion of assets under management and double the size of its UK wealth management business thanks to the Morgan Stanley deal. Meanwhile its long-trailed sale of Johim was finally concluded last month with the announcement of a management buyout supported by Bermuda National Limited.
In a no way complicated deal MGM Advantage agreed to sell its new business franchise to private equity group TDR Capital.
A new life company, financed by funds managed by TDR Capital, will continue to focus on the retirement income market trading under the MGM Advantage brand.
The deal will generate a payment of £9m for distribution to eligible members of the mutual society who hold with-profits policies and as part of the transaction, £800m of annuity business risk will transfer to the new life company, improving the financial strength of the closed mutual.
TDR will acquire MGM's staff, infrastructure, and brand.
Fisher’s big catch
Bullish as ever Towry boss Andrew Fisher (pictured) has not been shy to let people know the firm has ambitious expansion plans and backed this up with the acquisition Glasgow based investment advice firms Norscot Financial Services and George Square Fund Managers.
The two businesses advise around 900 clients. Norscot founder David Mills founded George Square in 2010.
Mills and his team from Norscot and George Square are joining Towry as a result of the deal.
There has been plenty of talk about consolidation in the Sipp market, but comparatively little action, however things are beginning to change. The end of 2012 saw a flurry of activity and Dentons made sure this continued into 2013.
Dentons got itself a slice of the action by acquiring RSM Tenon’s Sipp arm, Tenon Pension Trustees Limited, for an undisclosed sum.
The acquisition will see Dentons add approximately 650 Sipp plans to its existing book and another £250 million of assets under management to its £2 billion of assets under management.
Martin Tilley (pictured), Dentons director of technical services, said: ‘We are very happy, it’s something that strengthens our position in the marketplace and has taken over 12 months to negotiate.’
Sesame opens to offers
No sooner than insurer Friends Life confirmed it was looking to sell Sesame than the network took a leaf out of its parent’s book and sold its 10% stake in national IFA LEBC back to the firm’ management.
Sesame became a shareholder in LEBC in 2000 when it raised money for the national from the network's then parent Misys in return for a 30% stake in the firm. The stake has since been reduced to 10%.
Last year, LEBC chief executive Jack McVitie (pictured), said the firm expected Sesame would sell its stake after the national IFA moved to rival network Tenet in November 2011.
LEBC said: ‘LEBC has also completed the acquisition of Sesame Bankhall Group’s remaining 10% stake in LEBC, which Sesame has held since its initial investment in LEBC in 2000.
Taking a bite
A spending spree in the Big Apple has become something of a holidaying tradition, but most visitors probably wouldn’t have stretched to the $175 million (£112 million) Aberdeen Asset Management coughed up for New York-based Artio Global Investors.
Aberdeen chief executive Martin Gilbert (pictured) said the acquisition of the US fixed income manager, alongside another transatlantic deal to take a controlling stake in SVG Advisers, would help to boost its presence across the pond.
Spider good deal
A little bit smaller than the L&G and Cofunds deals but an important platform acquisition nonetheless Brighton-based Antrams Financial Services acquired execution-only website Moneyspider.com to provide a service for its lower-net-worth clients.
The proposition is aimed at clients with around £25,000 to invest and it already has 1,500 clients and £38 million in assets under administration.
Lester Killip (pictured), senior financial planner at Antrams, said: ‘We wanted two things: an avenue for smaller clients who wanted to do their own ISAs and collectives and, in addition, we’ll perhaps look at developing the system for IFAs to use for their clients.’
Killip said acquiring the service, as opposed to building it, had saved the firm time and meant it had gained clients and assets.
Sanlam enjoyed a busy 2012, snapping up 10 advice firms, and kicked off 2013 in much the same vein, with the acquisition of Plymouth-based Professional Connection and Bristol-based Berkeley Associates.
It has now reached the £2 billion assets under advice milestone, but given its ambitions to hit £6 billion by 2017, we can expect it to be reaching for the chequebook pretty frequently.
Once-noisy IFA consolidator Moneygate has been quiet for a while, but piped up in February when it announced the acquisition of the discretionary arm of Somerset-based Watermark Financial Solutions.
The Newcastle-based consolidator said in its most recent set of accounts that it had 24 acquisition deals in the pipeline, so it seems the Watermark buy will be the first of many this year.
Made in Wales
While Swansea City was charting its way towards its first major trophy in the League Cup, local advice firm Portfolio Financial Consultancy (PFC) was notching up a victory of its own with the acquisition of Abergavenny-based Barrett Bright.
The deal has boosted PFC’s assets under advice to £170 million. Director Chris Roche (pictured) said selling adviser Steve Barrett was looking for a firm that had ‘client focus and service delivery at its core’.