Rathbones has carried out a £24.4 million share placing to help fund a double swoop on Jupiter’s private client and charity business, and the former Tilney London business from Deutsche.
Rathbones is paying £43.5 million in cash for Jupiter’s private client arm, assuming all of its assets move over, and £14.3 million for Deutsche’s London team, which runs £700 million. The combined deal will see Rathbones assets under management rise by 12.7% to £24.8 billion. It raised the additional capital to fund the deal through a share placing with institutional investors yesterday.
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. Rathbones estimates the cost of the deal and the integration process to be around £1.8 million.
Around 30% of the private client arm’s assets are held in Jupiter’s in-house funds.
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 said it expects the combined effect of the two acquisitions to be earnings neutral in 2014 and enhancing in 2015. Its acquisition of Tilney will see it take on a team of five 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 deal comes on the back of Deutsche selling Tilney's regional business last year and the bank said it will now focus on ultra and high net worth clients.
Deutsche Asset & Wealth Management's (DeAWM) head of wealth management Tom Slocock said: 'This sale completes the realignment of DeAWM's UK strategy towards ultra-high and high net worth clients.'
Philip Howell, chief executive of Rathbone Brothers, said: ‘The acquisitions of these businesses from Jupiter Asset Management and Tilney Investment Management are an excellent fit. They demonstrate the merits of Rathbones to both clients and investment management teams, as well as our ability to capitalise on earnings-enhancing acquisition opportunities to grow our business. ‘We welcome the clients and investment teams of Jupiter and Tilney London and are sure that they will benefit from the stability and infrastructure that Rathbones provides.
‘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.’