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The runners and riders for Jupiter’s wealth arm
by Wealth Manager Team on Jan 27, 2014 at 12:22
We highlight the potential bidders for Jupiter’s wealth management business.
The race to buy Jupiter’s wealth management business is gathering pace, with final bids understood to be due in for the end of January.
A deal is expected within a few months, with a number of notable businesses in the running. Jupiter’s Private Client & Charities division, headed by Andrew Clark, had around £2.2 billion under management at the end of the fourth quarter, up £400 million compared to the previous year. Maarten SlendeBroek will replace Jupiter’s Edward Bonham Carter (pictured) as chief executive in March.
It is a business that has been running since 1985 and in 2008 the firm signalled its intention to grow the unit by hiring two separate wealth management teams from Singer & Friedlander and Bestinvest. This doubled its private client manager headcount.
Numis analyst David McCann values the business at £27-34 million (excluding balance sheet capital). He takes the view that a parent with a pure wealth management focus could be more successful at growing its assets.
Here we reveal the potential runners and riders.
Brown Shipley is understood to be in the running as a potential buyer for Jupiter’s wealth arm, as revealed by Wealth Manager on Thursday.
If Brown Shipley, headed by Ian Sackfield (pictured), is able to snap up Jupiter’s wealth division it would bolster the private bank’s operation in London.
Brown Shipley, backed by Qatari firm Precision Capital, previously competed for Deutsche’s regional network and the bulk of the former Tilney business. However, it was beaten to the post by Bestinvest owner Permira, which is now in final stage deal talks.
Last June, Brown Shipley executive director Robert Smoker highlighted London as a key growth area for the firm, with a one-year asset growth target of £100 million.
Rathbones, led by Andrew Pomfret (pictured), has proved itself to be acquisitive in recent years, having bought Bank of Scotland's private client business in 2009, RM Walkden & Co, AIB Jersey and Taylor Young in 2012.
A potential deal would allow deputy chief executive Philip Howell to make his mark when he takes over from Pomfret in February.
Investec Wealth & Investment
It has been a relatively quiet period for Investec Wealth after the large scale acquisitions of Rensburg Sheppards and Williams de Broë over the past few years. Both have now been integrated under the Investec Wealth & Investment brand.
With these acquisitions under his belt, CEO Jonathan Wragg (pictured) has previously said he is pleased to have been in the vanguard of a consolidation wave in wealth management.
Towry has also been tipped as a potential bidder for Jupiter’s wealth management business.
This may come as no surprise, given that Towry, backed by private equity firm Palamon Capital Partners, has been on an acquisition drive over the past few years.
It raised £35 million of new equity back in December 2012 to help fund the firm’s expansion plans. Recent acquisitions on the financial planning side include Lighthouse, Bluefin Personal Consulting and Deverill Black.
Back in 2009, Towry also bought stockbroker Edward Jones, which had £1.5 billion under management at the time.
Quilter Cheviot, backed by private equity firm Bridgepoint, has been linked as a potential buyer. Fresh from its merger and the subsequent integration of the two businesses, it is well positioned as another industry consolidator.
Headed by Martin Baines, the firm now manages close to £15 billion, making it a contender in the UK wealth management sector.
Permira, the owner of Bestinvest, may also prove a contender in the latest deal looming in the UK’s fragmented wealth management sector.
As the private equity firm pores over the finer details of a deal to buy Tilney's regional network from Deutsche Bank, further deals could be in the offing to increase the scale of its wealth management presence. If Jupiter was later merged into Bestinvest, it would see the Bestinvest team who joined Jupiter in 2008 reunited with their former colleagues.
Canaccord Genuity Wealth Management
Fresh from the integration of Eden Financial’s wealth business, Neil Darke, the chief executive of Canaccord Genuity Wealth Management, has said the company remains on the acquisition trail.
Jupiter, meanwhile, would significantly boost Canaccord’s UK presence – accelerating the business’s shift in focus from the Channel Islands to the mainland over the past few years.
Back in October, Darke (pictured) told Wealth Manager: ‘Although we have a good regional client base, in due course we may look at a regional presence in the UK, but we won’t mimic [firms] who have 20 or 30 offices.’
RBC Wealth Management
RBC Wealth Management is another firm looking to grow its presence in the UK. Jupiter’s London-based business and its £2.26 billion in assets would bolster the bank’s private client investment operation on the mainland.
The firm has spoken of its ambitions to make the UK its third key market after Canada and the US.