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Brown Shipley enters race for Jupiter wealth arm

by Danielle Levy on Jan 23, 2014 at 10:22

Brown Shipley enters race for Jupiter wealth arm

Jupiter’s management team has invited final bids for its wealth management division by the end of January as Brown Shipley emerges as a contender for the business, Wealth Manager understands.

Negotiations over the potential sale of Jupiter’s wealth management arm are gathering pace, with a deal expected within a few months. Brown Shipley has emerged as a potential buyer, a move that would bolster the private bank’s investment management operation in London.

Brown Shipley, backed by Qatari firm Precision Capital, previously competed for Deutsche’s regional network and the bulk of the former Tilney business. However, it was beaten by Bestinvest owner Permira, which is now in final stage deal talks, as previously revealed by Wealth Manager.

Last June, Brown Shipley executive director Robert Smoker highlighted London as a key growth area for the firm, with a one-year asset growth target of £100 million.

Rathbones, Quilter Cheviot and Towry have also been highlighted as potential bidders by the Sunday Times, which named investment bank Evercore as responsible for a strategic review of Jupiter’s business.

The Private Client & Charities division, headed by Andrew Clark (pictured), managed £2.26 billion at year-end. A source close to the situation estimates around one third of the assets are currently run on an advisory or execution-only basis on behalf of Jupiter’s staff, alongside their friends and family.

This could weigh on the potential valuation of the business, the source anticipated, due to concerns about how sticky these assets could ultimately prove after the sale.

Numis analyst David McCann values the business at between £27-34 million (excluding balance sheet capital). He takes the view that a parent with a wealth management focus could be more successful at growing its assets.

Jupiter’s private client business has been running since 1985. In 2008, the firm signalled its intention to grow the unit by hiring two separate wealth management teams from Singer & Friedlander and Bestinvest, which doubled its private client manager headcount. Maarten SlendeBroek will replace Jupiter’s Edward Bonham Carter as chief executive in March.

Jupiter and Brown Shipley declined to comment.

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