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Investec Wealth: buy targets look overpriced

Investec Wealth: buy targets look overpriced

Investec Wealth & Investment has ruled out imminent acquisitions, saying the price tags that are being placed on some businesses in the sector are inflated.

Investec’s managing director Bernard Kantor told Wealth Manager that organic growth and hiring in teams are now central to the bank’s growth strategy in UK wealth management. It marks a change for Investec, which has been particularly acquisitive in recent years, with the buys of Evolution in 2011 and Rensburg Sheppards back in 2010.

While Kantor said the benefits of these deals are now feeding through in the wealth management division, contributing to a 30% operating profit rise over the year to the end of March, he said of hires: ‘I don’t think we will rush into the market to make an acquisition, as we can attract a lot of teams from some of the other players.

‘It takes time to integrate and bring assets on board and hiring is a lot cheaper than paying the multiples we have seen [for potential deals] as a percentage of funds under management. We are much happier with this strategy.’

‘I think Investec is in a very nice niche at the moment. It has a good reputation and name in the market. The business runs totally independently and wealth managers are not told what to do and we have never forced our product through their channels to the client. People like the approach and enjoy the environment. That has attracted a lot of good people over the last 12 to 18 months.’

Investec W&I has been busy on the recruitment front over the past year, with 13 hires from Deutsche and Barclays across its Edinburgh and Glasgow offices alone late last year.

Kantor added the firm will look to continue developing a more integrated private banking and investment management model in the UK.

He said the recent launch of a transactional banking card in the UK represented a significant step towards attracting new professional and high net worth clients.

Likewise, speaking to private banking clients about investment management will prove key. ‘We are already speaking to private banking clients and seeing if we can get them to move some of their wealth across to us,’ he added.

In the UK, Investec now has a presence across 16 cities and Kantor said the management team is largely happy with its regional presence, with no imminent plans to open new offices.

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Profile: The opportunity set that attracted Brett Williams to wealth management

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Brett Williams is best known for helping to build some of the biggest platforms in the IFA market.He made the move over to wealth management to head SEI’s UK business earlier this year in the belief that this is where the best opportunities now lie.

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