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Competition for deals is rife, says Brown Shipley banking head
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by Danielle Levy on May 27, 2014 at 00:01
Buying businesses that do not fit culturally, or end up causing an operational headache, is a recurring nightmare in the wealth management sector.
Brown Shipley incoming head of private banking Hugh Titcomb is keen to avoid this fate.
While he is willing to survey the opportunities that are out there at the moment, he says the private bank’s growth strategy is not predicated on doing deals.
‘Acquisitions are certainly something we will consider here and we regard it as part of our growth strategy, but our growth strategy is not based on a requirement to make acquisitions,’ he says.
‘You need to understand why you are buying it, what the business is going to do for you and will it add scale. Can you make sure you can benefit from that scale through operational gearing or enhance the service offering you have got to support your clients?
‘Above all, you have got to make sure the acquisition is truly going to add value, and you can integrate it in such a way that it works. It really goes back to understanding the culture and the role the business can play in the combined businesses,’ he explains.
As firms across the industry grapple with stalling organic growth prospects, regulatory costs and a lack of scale, deals are rife right now and Titcomb says competition among acquisitors is intense.
‘There are lots of potential buyers out there, so it is very important to focus on what you are trying to achieve by buying businesses,’ he adds.
Titcomb is certainly well positioned to comment, having run Principal Investment Management between 2009 and 2012, during which time he oversaw the acquisitions of Border Asset Management and Iain Nicholson Investment Management, which he says proved to be successful deals.