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Schroders agrees to £424m Cazenove Capital buy

by Dylan Lobo on Mar 25, 2013 at 07:08

Schroders agrees to £424m Cazenove Capital buy

Schroders has struck a deal to buy Cazenove Capital for £424 million and has committed to keeping the firm's wealth management brand.

Under the terms of the deal Cazenove Capital shareholders will receive 135p in cash per ordinary share.

Schroders said the acquisition will provide economies of scale, principally in UK funds distribution and infrastructure, and it expects to achieve pre-tax cost synergies of between £12 million and £15 million per annum.

In a statement to the London Stock Exchange, Schroders said the acquisition reflects its strategy of growing its private banking business, while strengthening its position in UK Intermediary.

'Cazenove Capital's culture of client focus and investment excellence are a strong fit with Schroders,' Schroders chief executive Michael Dobson said in a statement.

'This transaction creates a leading, independent private banking and wealth management business in the UK, and brings additional investment talent in complementary strategies across UK and European equities, multi-manager and fixed income to asset management. I am confident the transaction will create long-term value and benefits for clients, shareholders and employees.'

Wealth Management

The merged entity, according to figures from 31 December 2012, will control £28.4 billion in assets under management and will make Schroders a one-stop shop, offering investment management, financial planning, deposit-taking and lending services.  

Schroders has committed to continue using the 'highly regarded' Cazenove Capital brand within its private banking business, with Cazenove Capital chief executive Andrew Ross named as UK private banking head, reporting to Schroders group head of private banking Philip Mallinckrodt.

Mallinckrodt said: 'We believe the combination of our two businesses will bring significant benefits and enhanced opportunities for our clients. The complementary fit between our two firms, the strong shared service culture, long-term investment approach and established heritage of both businesses make this an ideal match.' 

Ross added: 'This is a very exciting development for Cazenove Capital. In combining with Schroders, we will create a pre-eminent independent private banking and charities business in the UK, with a broader capability covering investment management, financial planning, deposit-taking and lending services. This is also an excellent fit for our wealth management businesses in the Channel Islands and Asia.  

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1 comment so far. Why not have your say?

Mr Blues

Mar 25, 2013 at 17:28

I'm pretty sceptical.... as an investor I would be pretty annoyed if a range of Cazenove managers left following the deal, as normally happens. I would have preferred it they left Cazenove alone...

Don't blame Buxton....easier to start again with a smaller fund than compete with an inbound pack of UK eq managers.

My gut reaction is that the only people it will ultimately benefit is a small number of senior executives, not the private investor. The styles are quite distinct of several funds compared to Schroders...why they feel they need to try and take over the world doesn't make sense to me. Fund bloating is a fairly sure recipe for poorer performance.

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