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M&A Frenzy: the biggest moves so far
by Elsa Buchanan on Apr 10, 2014 at 13:51
It's been a busy start to the year, marked by some significant developments in the industry. Here, we highlight the biggest deals so far, from the suspected to the surprising.
Seneca’s unexpected purchase of Miton’s Liverpool fund business - 24 January
Seneca Partners set out its ambitious plans to double assets under management over the next three years through its acquisition of Miton’s Liverpool fund business.
Seneca’s chief executive Stuart Eaton (pictured) told Wealth Manager that the acquisition of Miton Capital Partners, the Liverpool fund management business, for up to £6.4 million would give the firm a broader proposition and hopefully expand its reach with intermediaries.
In 2013 Miton's £466 million in funds managed from Liverpool generated a gross revenue of £4.6 million. Miton said an unsolicited approach prompted a strategic review of the Liverpool business, which had always been managed separately from its Reading and London divisions.
Although Liverpool's performance had improved in recent years, Miton concluded there was less prospect of rapid growth of its assets under management compared with other parts of the group.
River and Mercantile to merge with P-Solve – 26 February
River and Mercantile Asset Management (R&M) announced it was to merge with investment consultancy P-Solve in a move that could see the combined group floating onto the stock market.
The merged firm is expected to be renamed River and Mercantile Group, and will retain the two companies’ existing business channels but will look to develop new services. P-Solve's chief executive Mike Faulkner will be CEO of the combined group with R&M chief executive James Barham (pictured) set to continue heading the equity managament business.
These will combine R&M’s equity management with the asset allocation and derivative management capabilities of P-Solve to offer outcome-focused mandates for both the retail and institutional markets.
The two companies majority shareholders, Pacific Investments, which has a large stake in R&M, and Punter Southall, the owner of P-Solve, will retain strategic shareholdings in the merged firm.
F&C’s take over by BMO Financial Group - 27 January
Earlier this year, F&C Asset Management confirmed that BMO Financial Group, the Canadian bank, was looking to acquire the firm.
BMO, a division of the Bank of Montreal was 'likely to recommend a firm offer at the offer price', F&C stated, as BMO offered 120p in cash per ordinary share. This was a significant premium to 93.5p when they closed on 24 January.
The news came after Edward Bramson stood down as chairman of F&C last summer, having taken control of the group in 2011 and embarked on a major strategic overhaul, which saw a number of jobs axed in an aggressive cost-cutting programme.
F&C has suffered substantial outflows in recent months, with the group's assets under management declining by 2.4% to £90.1 billion in the three months to 30 September 2013 alone. The firm ran £100 billion in 2011.
Permira takes on the regional business of Tilney from Deutsche - 27 February
In February, private equity group Permira confirmed the acquisition of the regional business of Tilney from Deutsche.
Wealth Manager had revealed the group had beaten rivals bidders in November, but the deal was only signed off in February,for an undisclosed sum.
The transaction, which is expected to be completed by the end of the second quarter of 2014, formed part of Permira’s aim of tripling the combined group’s assets under management ‘over the next couple of years’.
This includes a merger of the Tilney business, and Bestinvest, which it acquired last November.
Philip Muelder, a partner at Permira described the two firms as a 'good fit' with Bestinvest largely London-based while the Tilney acquisition has seen it take the company’s offices in Birmingham, Edinburgh, Glasgow and Liverpool.
The Tilney name will be retained in the regions with Bestinvest also set to keep its brand.
Tom Slocock (pictured), head of wealth management in the UK for DeAWM, said: 'Deutsche Asset & Wealth Management will continue to focus on providing wealth management services from our London office.'
Lord North Street merges with SandAire - 20 March
Multi-family office SandAire and Lord North Street announced they were to join forces, but said they would retain their own branding for the time being.
The deal will see private investment office Lord North Street become a wholly owned subsidy of SandAire, and the combined group will be led by new chief Alexandra Altinger, who joins from Lansdowne Partners.
It is a move the two firms hope will create a force to be reckoned with in the UK private investment office market, with billions under management.
Alex Scott (pictured), SandAire’s founder, will become executive chair of the combined group with Lord North Street founders William Drake and Adam Wethered assuming vice chair roles.
Altinger, who joins as chief executive, most recently worked for Lansdowne Partners.
Punter Southall forms strategic pact with Kent-based wealth firm – 25 March
In a growth push, Punter Southall Group (PSG) bought a minority stake in Canterbury-based wealth firm Argentis Financial Group (AFG).
Through the strategic partnership, which remains subject to regulatory approval, the UK consulting group said it will help AFG grow its financial planning and wealth management business.
PSG group managing director Kenneth McKelvey will join the board of AFG, which will continue to operate independently under the leadership of chief executive David Taplin.
AFG was established in November 2005 in Canterbury. In 2008 the business opened offices in Cobham, Surrey and Salisbury, Wiltshire, and set up shop in central London a year later.
By the end of 2013, AFG which employs 65 people, was responsible for more than £1.3 billion.
The news comes a month after PSG announced the merger of its institutional investment advisory arm, P-Solve, with River and Mercantile Asset Management.
Standard Life Investments seals Ignis buy in £390 million deal - 26 March
Standard Life Investments (SLI) agreed to buy Ignis Asset Management for £390 million.
As part of the transaction - which is expected to be completed by the end of June - SLI will enter into a strategic alliance with previous Ignis owner Phoenix through which it will provide asset management services to Phoenix’s life company subsidiaries, including the potential to manage future books of assets that Phoenix may acquire.
The Edinburgh-based fund manager said Ignis would complement its strong organic growth and 'reinforce its foundation' for building a business in the rapidly developing liability aware market.
Indeed, Ignis has benefited from the popularity of its Absolute Return Government Bond and Property funds.
In a separate results announcement, Ignis said it had attracted a record £1.9 billion in net inflows in 2013, exceeding the £1.6 billion achieved in 2012, while combined UK wholesale and European net sales, excluding liquidity, increased more than threefold year-on-year.
The firm's liquidity products attracted an additional £420 million of net inflows in 2013.
The combined business will offer a full range of investment solutions, including active management for institutional and wholesale clients, discretionary wealth management for high net worth private clients and outcome orientated products for maturing pension schemes and insurance companies.
Commenting on the transaction, Keith Skeoch (pictured), chief executive of SLI, said: 'This acquisition is entirely complementary, deepening our investment capabilities, broadening our third party client base and strengthening our strategic position from which to develop a business in the rapidly developing liability aware market. Standard Life Investments continues to perform very strongly.'
Aberdeen completes SWIP acquisition - 01 April
This month, Aberdeen completed its acquisition of Scottish Widows Investment Partners (Swip) and said it expects the deal to be earnings enhancing from year one as it looks to cut costs.
The acquisition, which creates a combined group with £324.5 billion in assets under management, will cost Aberdeen £550 million in total and see Swip’s parent Lloyds Banking Group take a 9.9% stake in the fund manager.
In a stock market update, Aberdeen said the integration of Swip will start immediately and is expected to take 24 months. It added that the deal will bring ‘significant cost savings’ although it is aiming to achieve a reduction in overheads ‘over and beyond the synergies from the Swip integration.’
Chief executive Martin Gilbert (pictured) said: ‘We are pleased to have completed this important acquisition as planned and on schedule, so that we can now commence the task of integrating Swip into the enlarged Aberdeen Asset Management group.
'We will immediately begin a structured migration of funds and platforms, whilst continuing to deliver an excellent investment performance for both existing and new clients.'
Rathbones pays £43.5 million for Jupiter – 01 April
This month, Wealth Manager revealed Rathbones was acquiring Jupiter’s private client arm and was paying £43.5 million in cash for it.
Rathbones surprised the markets when it performed a double swoop on Jupiter’s private client and charity business, and the former Tilney London business from Deutsche.
Jupiter’s private client and charity team has £2.1 billion in assets under management and the deal, which will cost Rathbones between £32 million and £53.9 million, depending on asset retention and flows, and is expected to complete at the end of the third quarter.
Jupiter Fund Management chief executive Maarten Slendebroek (pictured)said: ‘Our private client operations have been part of Jupiter since the group was founded in 1985.
'However, the group has evolved to become predominantly a mutual fund provider and we believe it is in the best long term interests of our private clients for them to transfer to Rathbones, a specialist wealth management organisation.’
Rathbones estimated the cost of the deal and the integration process to be around £1.8 million.
Rathbones splashes £14.3 million for Deutsche’s London team – 01 April
Along with Jupiter’s private client arm, Rathbones paid just over £14 million for Deutsche’s London team. The five-strong team, which runs £700 million, is headed by Jeremy Newman.
David McSorley, who was a fund manager and director, also joins along with relationship managers Tom Smyth, Matthew Haworth and Nigel Reynoldson.
The combined deal, for which the firm carried out a £24.4 million share placing, will see Rathbones assets under management rise by 12.7% to £24.8 billion.
Rathbones said it expects the combined effect of the two acquisitions to be earnings neutral in 2014 and enhancing in 2015. Philip Howell (pictured) Rathbone Brothers’ CEO, said: ‘The acquisitions of these businesses from Jupiter Asset Management and Tilney Investment Management are an excellent fit.
‘We expect to see more acquisition opportunities in the private client industry in the short to medium term. Raising capital now will give us flexibility to continue to take advantage of similar opportunities as they arise.’
Ingenious AM merges with Thurleigh - 03 April
The merger between Ingenious Asset Management and Thurleigh Investment Managers came as a surprise to the industry when it was announced this month.
Scheduled to complete at the end of April, the deal will see the firms combine their investment teams and manage £1.8 billion in discretionary private client assets and platform- based model portfolios.
Ingenious was established in 2003 and specialises in managing money on behalf of individuals, charities, families, trusts and pension funds. Ingenious, meanwhile, manages £1.5 billion of client assets, primarily in global multi-asset portfolios, and manages over £120 million on platforms.
Also established in 2003, Thurleigh, run by Charles MacKinnon (pictured) manages £300 million assets on behalf of private investors, family offices and charities.
Scoban to rebrand after major investment boost – 03 April
Scoban announced it is to take on a new name following insurance and financial services company Hampden's decision to take a significant stake in the business.
The UK's newest private bank will operate under the name Hampden & Co. The investment comes after Scoban launched a fundraising via an open offer to its existing shareholders in which it targeted £40 million.
The bank, which opens for business later this year after receiving regulatory approval, also indicated Hampden's interest could increase materially as it continues to seek capital from institutional investors.
Commenting on the development, Scoban chair Ray Entwistle (pictured) said: 'It is a very exciting development for us to have a company such as Hampden taking a significant investment in our new bank.
'Hampden is a fantastic business with a successful track record in different fields over a number of years. It provides excellent service to its clients and will be a great fit with a new high quality private bank.'
City Financial to buy Iveagh funds business – 04 April
Another surprise came as City Financial announced it was acquiring Iveagh's funds business.
Iveagh's CIO and investment team will move over as part of the deal to run Iveagh's multi-asset funds business, worth just under £200 million, which will transfer over.
The deal, which is subject to regulatory approval, follows City's acquisition of OPM Fund Management last year, as revealed by Wealth Manager, alongside that of Eden Financial the previous year.
The investment team, including former Wealth Manager cover star Wyllie (pictured) will move over once the deal completes.
Richard Ford, CEO of Iveagh, commented: 'Iveagh and City Financial are delighted to confirm that they are entering into an arrangement to transfer Iveagh's Dublin-domiciled Ucits business to City Financial.
'Investors in the funds should be reassured that the investment team will remain headed by Chris Wyllie and the Guinness family will remain invested in the funds.'