Xcap Securities has entered the multi-asset market with the acquisition Hume Capital.
The private client wealth firm has raised £2.4 million through a placing to fund the acquisition, which remains subject to shareholder approval. The deal will see Hume founder Nitin Parekh replace Daron Lee as Xcap chief executive.
Through the purchase Xcap incorporate the Hume Capital LLP group of multi-asset investment firms, which run a range of strategies focusing on equities, fixed income, absolute return and multi-manager and controls £250-million worth of assets.
Hume was founded in 2007 by Parekh, who quit his role as global chief investment officer of Credit Suisse Private Bank to set up the boutique. The firm employs 19 people and has, according to the group, attracted 2,900 wealth clients since its launch.
The acquisition - which lifts group assets to £290 million - is part of Xcap’s desire to become a leading ‘one stop shop’ for corporate and private client wealth management.
Since its float on the Alternative Investment Market in May 2010, the group has found it difficult to deliver organic growth within its wealth management business. It puts this down to ‘a reluctance of individual fund managers and brokers to go through the upheaval of inter-firm client moves.’
The situation was exacerbated by the downturn in markets, which hit sector and investor confidence and impacted Xcap’s ability to deliver profitability.
As a consequence the board made the decision to grow the business through a combination of acquisition and organic expansion.
Commenting on the Hume acquisition, Xcap chairman Sir Peter Middleton told the stockmarket: ‘The support for the proposed acquisition from both new and existing investors has been hugely encouraging. We believe there are clear synergies between the operations of Hume and Xcap.
‘Whilst current markets have undoubtedly been difficult and have affected many businesses in our sector, we believe the financial stability that this transaction provides will create opportunities for the enlarged group to gain critical mass and to increase both assets under management and the level of trading and corporate advisory work we undertake.’