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How will the SandAire-Lord North Street tie-up work?

How will the SandAire-Lord North Street tie-up work?

SandAire and Lord North Street will continue to be run as separate entities following their merger, with the new management team taking its time over the integration and the name of the combined business.

Subject to regulatory approval, SandAire and Lord North Street are set to merge operationally. Lord North Street has technically been acquired by SandAire, with key employees given shares in the business.

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.

Both investment offices have faced each other as competitors for many years – with major families, individuals and endowments, including Oxford and Cambridge colleges, forming the bulk of both client bases.

‘A good fit’

Lord North Street co-founder William Drake explained: ‘Alex [Scott] and I kept in touch as competitors. We wanted to see if our instinct was right if we would be a good fit, given that we both built the businesses from scratch and tried to create something different from the market and banks.

‘We came up with almost identical conclusions about the business model, charging clients without any bias towards more expensive asset classes and wanting to use external managers rather than funds. These are the key elements of our business models. There are small technical differences but the fundamentals are remarkably the same.’

He added that the deal was not driven by a desire to bring about cost savings, but a motivation to capitalise on the combined strengths of the two organisations to ‘raise the game so that London has an absolutely world class private investment office’.

He hoped the deal will allow both companies to develop a sound proposition for the future.

‘It is an unusual transaction because it is not driven by cost savings at all. There are no redundancies or anything like that,’ Drake said.

As a result, the combined management team will take its time coming to key decisions over brand and investment process. The two businesses will continue to be run as separate entities for the foreseeable future.

‘We are going to keep the two entities for the time being, so clients will have exactly the same service, the same people looking after them and the same investment process. Then we are going to put our heads together to decide the best way to do things. Things aren’t going to change overnight. We have got to provide continuity to clients,’ Drake said.

The integration

His sentiments were echoed by SandAire founder Alex Scott (pictured).

‘What we are creating is a business with greater critical mass and that will bring more skills and knowledge within the business and therefore at the disposal of our clients. One of the strong characteristics of the combined business is our clients, who, in the main, are successful individuals and families,’ Scott said.

‘This is an exciting opportunity to have a larger critical mass of clients to work with as we develop the business further.’

On charges, Drake said: ‘We have the same methodology exactly, so we will continue as we are for clients.’

Scott said that it would not be a battle between the two brands when it came to integration.

‘We recognise that both brands have sound reputations. This is our starting point and when we consolidate we need to make sure we are respectful of that.’

Scott added that while mergers and acquisitions have continued in the mainstream wealth management sector over the past three years, he does not view the SandAire-Lord North Street tie-up as part of a similar trend in the private investment office sector.

Nonetheless he hopes the impending integration will ultimately be viewed as ‘an exemplar of an effective merger of two boutiques coming together’.

Once the deal receives regulatory approval, the two teams will move to the same office and start talking to clients.

Scott will become executive chairman of the combined group, with Lord North Street founders William Drake and Adam Wethered assuming vice chair roles.

Alexandra Altinger, who joins from Lansdowne Partners, will become chief executive. Wethered, Drake, managing director Olivia Hancock and head of client services Drew McNeil will all join the board.

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