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Six wealth firms which could buy £5bn Saunderson House

Saunderson House is up for sale, so who is likely to be in the bidding?

Ears will have pricked up across the industry when IFG Group announced last week that it is considering selling its wealth arm, Saunderson House. 

IFG is struggling under the weight of a looming HMRC sanction of up to £20 million on behalf of Sipp clients who invested in biofuel fund Elysian Fuels.

But suitors hoping to snap up Saunderson House on the cheap are likely to be disappointed.

The parent group reported that it has already received ‘a number of approaches’ for the business, so competition for its £5.1 billion of assets looks set to be intense.

So who is likely to be in the bidding?

 

 

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Ears will have pricked up across the industry when IFG Group announced last week that it is considering selling its wealth arm, Saunderson House. 

IFG is struggling under the weight of a looming HMRC sanction of up to £20 million on behalf of Sipp clients who invested in biofuel fund Elysian Fuels.

But suitors hoping to snap up Saunderson House on the cheap are likely to be disappointed.

The parent group reported that it has already received ‘a number of approaches’ for the business, so competition for its £5.1 billion of assets looks set to be intense.

So who is likely to be in the bidding?

 

 

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Tilney

Tilney, backed by private giant Permira, is an obvious candidate.

Just under two years on from buying Towry for £600 million, it has recently completed the integration of the firms, creating a £25 billion behemoth. It previously completed smaller deals, snapping up Midas’ £162 million wealth business last August and Ingenious, with £1.8 billion AUM, in early 2016.

Tilney, which recently had a change of management with Chris Woodhouse (pictured) taking over as CEO, was also understood to have tried to hijack Rathbones’ failed attempt to merge with Smith & Williamson in the summer.

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Rathbones 

Rathbones, led by CEO Philip Howell (pictured), remains vocally on the hunt for acquisitions, but is the deal big enough to match its requirements, with Saunderson House having far less assets than Smith & Williamson’s £19 billion? And would it favour discretionary money?

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Sanlam UK

Sanlam UK’s CEO and regular dealmaker Jonathan Polin (pictured) has also talked of buying firms and £5.1 billion would increase the company’s AUM by around half.

It completed its acquisition of Cheltenham-based Tavistock Financial in October 2017 adding 158 financial advisers to its network. Maybe now that's completed, it may be time for another deal. 

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LGT Vestra 

Another perhaps less obvious name is LGT Vestra, led by chairman David Scott (pictured) and CEO Ben Snee, with its Liechtenstein owners always keen to expand its portfolio of assets.

The parent group has deep pockets and the deal would increase the wealth business’s AUM by around 50%.

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Old Mutual Wealth

Old Mutual Wealth is another acquisition-driven firm, but may not want to take on a new buy with its market float looming.

Its most recent purchases have mainly been to bolster its financial planning division OMW Private Client Advisers. 

Last year, CEO Paul Feeney (pictured), said the company was focusing on its managed separation and listing. 

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Davy 

Stockbroker Davy has also been named as a potential suitor, as it is set to pocket €60 million (£53 million) for its stake in the Irish Stock Exchange following its sale to Euronext.

The company recently acquired Danske Bank's wealth management business in Northern Ireland, which has around £500 million in assets under management. 

Chief executive Brian McKiernan (pictured), said at the time: 'This deal reflects an ongoing trend of consolidation and specialisation of wealth management services in favour of providers of scale with the requisite investment in both compliance and investment insight. We expect this trend to continue and we see continuing opportunities for appropriate bolt on acquisitions.'

Davy said it has no comment however on a possible Saunderson House bid. 

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One factor deciding who could potentially seal a deal is to actually look at the composition of Saunderson House.

The vast bulk of its assets are advisory and this could deter some firms, which would just want to bolt on its discretionary funds.

No one outside Saunderson House definitively knows what its discretionary assets under management (AUM) actually are.

The service only launched in 2016 and IFG has never split its discretionary AUM out in its results, although it likely will for the first time when it posts its 2017 full-year numbers on 23 March.

IFG said it will provide an update next month, but with the speed deals that are being done, we may not have to wait that long to find out.

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