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Seven firms which could buy Deutsche's regional wealth arm
on Jul 02, 2013 at 10:04
We highlight the potential runners and riders for Deutsche Asset & Wealth Management's regional business after revealing it had been put up for sale last week.
Wealth Manager broke the news that Deutsche Asset & Wealth Management is readying a sale of its regional network and the bulk of the former Tilney business that it acquired in 2006.
Since Tilney was acquired for a sum which is understood to have been over £300 million, it has been largely loss-making for Deutsche, posting a £9.5 million pre-tax loss in 2012. Assets stood at £4.6 billion at the end of 2012, down year-on-year from £5 billion, while the management team has made efforts to move clients into a centralised investment service in recent years.
Deutsche Bank's UK wealth management business, led by Tom Slocock (pictured), is expected to retain a presence in London and the portfolios it runs for ultra-high net worth clients, but would look to withdraw from the regions. It has offices in Birmingham, Edinburgh, Glasgow and Liverpool, presenting an opportunity for a rival to bolster its regional presence or perhaps a new entrant into the wealth management space.
Private bank Brown Shipley, which counts Ian Sackfield (pictured) as its managing director, has shown itself to be acquisitive throughout its history. Over the past few years it acquired the investment arms of Gillespie Macandrew and Lindsays, both in Edinburgh.
While the bank already has a presence in Birmingham and Glasgow, the buy could give it a foothold Liverpool. In a recent interview with Wealth Manager, executive director Bob Smoker said further acquisitions could not be ruled out. ‘With the wealth management market it tends to be who is available and what the targets and opportunities are that come up. I don’t think we would be in a position to go in as a start-up in those areas unless there was a good case to do it,’ he said.
Rathbones, led by Andy Pomfret, has been acquisitive in recent years, having bought Bank of Scotland's private client business in 2009, alongside RM Walkden & Co, AIB Jersey and Taylor Young in 2012. While there are regional overlaps with the ex-Tilney business, most notably in Liverpool where Rathbones has a big presence, the national wealth manager should not necessarily be ruled out of the running.
Investec Wealth & Investment
It has been relatively quiet period for Investec since it instigated a flurry of activity in the UK private client market, after taking over Rensburg Sheppards in 2010 and Williams de Broë in late 2011. Both have now been integrated under the Investec Wealth & Investment brand. With two large scale acquisitions under his belt, CEO Jonathan Wragg has said he will look to lead the next wave of consolidation.
‘Looking at the sector in three to four years’ time, I would like to think we will be shown to have been at the vanguard of the next wave of consolidation,’ Wragg said in an exclusive interview with Wealth Manager in late 2012.
Quilter, backed by private equity firm Bridgepoint, surprised the market last year after it snapped up Cheviot Asset Management. Although the company is finalising the integrated structure, former CEO of Cheviot Michael Kerr-Dineen’s new role in the combined group is to identify new targets.
Quilter chief Martin Baines (pictured) told Wealth Manager in the wake of the deal: ‘You can never say never. We have just exchanged on this transaction, but certainly we will be looking at other opportunities that come up.’
Signia Wealth’s Rupert Robinson has expressed an interest in regional expansion, following the firm’s success in establishing a presence in Birmingham alongside its London hub.
Buying Tilney’s regional network could also help the wealth manager to meet its target of doubling the £2.2 billion in assets that it has amassed since launching in 2010.
Head of wealth management Robinson (pictured) said the North of England was of particular interest in a recent interview with Wealth Manager.
Sanlam Private Investments, backed by its South African parent, has proved one of the most acquisitive wealth firms in the UK in recent years after acquiring a string of wealth management and advisory businesses, including Buckles, Principal Investment Management and Border Asset Management. While the business has been particularly busy snapping up adviser firms looking for an exit post-RDR, Deutsche’s regional discretionary assets could provide a boost to Sanlam’s UK investment management business.
Standard Life Wealth
While Standard Life Wealth (SLW), headed by Richard Charnock (pictured) is in the process of integrating Newton’s private client business, the firm could well prove to be in the running. Although SLW has experienced rapid growth since launch in 2008, amassing over £1 billion in assets, Charnock said the firm had been open to acquisition opportunities but had strict criteria.