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Brooks' FUM to hit £4.5bn on Arch Cru fund manager buyout

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Brooks' FUM to hit £4.5bn on Arch Cru fund manager buyout

Brooks Macdonald has acquired Spearpoint, a Jersey and Guernsey-based provider of discretionary fund management amd manager of the Arch Cru funds.

The acquisition should be complete by Monday and will see Brooks take on the fund manager, which also has stockbroking and retirement planning capabilities.

Announcing the deal to the stock exchange, Brooks, which is listed on the alternative investment market (AIM), said Spearpoint is considered a leader in integrated wealth management in the Channel Islands and has funds and assets under management of approximately £1.1 billion.

The combined group will have discretionary funds under management of approximately £4.5 billion, excluding advisory, property and third party administration assets.

Part of this process of integration will include the proposed placing of 1,869,566 new ordinary shares, with the aim of raising £21.5 million.

This should cover the bulk of the acquisition cost, which is estimated in the region of £23.1 million.

Speaking to investors about the deal, Chris Macdonald, chief executive of Brooks Macdonald, said the acquisition should immediately enhance the firm's earnings given that Spearpoint reported pre-tax profits of £3.91 million on revenues of £11.42 million for the year ended last December. 

Moreover, the acquisition fits with the AIM-listed group's plans for growth.

'The acquisition of Spearpoint is a major step forward and captures an opportunity we have been seeking for a number of years,' Macdonald (pictured) said.

'It adds scale, offshore and international capability together with the acquisition of a strong investment management and pensions team.

'We look forward to welcoming Spearpoint's clients and staff to Brooks Macdonald. There is a good synergistic and cultural fit with our existing growth strategy and business.

'We are confident  the combined group will be a leading presence in UK wealth management and that the acquisition will be immediately earnings enhancing.'

John Davey, chief executive of Spearpoint, also commented on the deal.

He said: 'We are delighted to be joining the Brooks Macdonald Group. There is a strong fit in terms of investment management style and culture.

'Brooks Macdonald's proven marketing and distribution and well established brand provide us with the tools to focus on growth.'

Spearpoint is also known for looking after the Arch Cru funds.

It took over management of the Arch Cru funds in December 2009, charged with a mandate of gaining as much value from investors in the wind-up of the funds.

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