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View the article online at http://citywire.co.uk/wealth-manager/article/a757346

Walker Crips’ Fitzgerald: Competitors for sale are overpriced

by Elsa Buchanan on Jun 19, 2014 at 15:25

Walker Crips’ Fitzgerald: Competitors for sale are overpriced

Walker Crips is on the acquisition trail as it looks to build up its wealth management division, but chief executive Rodney Fitzgerald admits he is struggling to find value in the market.

‘We have the resources to make a decent-sized acquisition with £8 million of cash on our balance sheet and an £18 million market cap,’ he said. ‘There are plenty [of businesses] for sale, but they all seem to be wanting more than they are worth.’

Walker Crips posted an underlying profit of £500.000 in the 12 months to the end of March 2014, reversing a loss of £1 million in the previous year. Gross profit (net revenues) increased 19.5% to £14.1 million, which Fitzgerald (pictured) attributed to a ‘substantial transformation’ of the business.

This followed a two-year strategy of moving from being a traditional private client stockbroker to a full service investment and wealth management provider. Fitzgerald is also keen to expand the wealth management arm.

‘To complement our business we would probably like a wealth management business, as investment management is flying now,’ he said. ‘To address the balance between investment and wealth management, that would be the desired.’

While discretionary and advisory assets under management (AUM) rose by 29.2% to £1.33 billion over the financial year, he says the business is also focusing on growing its advisory division.

Targeting Chinese investors

The firm has been building its ‘investor immigration programme’, which is initially targeting Chinese investors.

‘We have an introducer operation bringing us funds under management straight from China, representing £30 million today,’ Fitzgerald said.

‘For the moment, [we will] concentrate on that market, because we’ve got a strong Far East connection as our majority shareholders are from Singapore. That’s where the bulk of the business is coming in, and it is rising quite fast.’

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2 comments so far. Why not have your say?

Aries

Jun 21, 2014 at 12:57

Why did they close a sussex office which had been in existence for 30 years rather than expand it ??!!

report this

CoeurDeLion87

Jun 24, 2014 at 08:21

Quite why a transformation from traditional broking to 'wealth' should command a premium is beyond most. As fees come under pressure and head towards .25%/.35% (from 1%+) against rising regulatory & management costs the entire sector appears to be living on Cloud 9 aka Cuckoo Land. UK is clearly over-brokered and any growth hereon must come from newly emerged areas such as China & FE, India, Russia, Brazil and Africa.

There is scant evidence that London/UK has gained significant traction as the centre of choice for the wealth that these high GDP % areas have created.

The suggestion then is that Walker Crips itself is severely over-priced along with many competitors. £30m FuM from China is a drop in the ocean.

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