RATHBONE Brothers bolstered its private banking business yesterday after spending around £57m on two acquisitions, increasing its assets under management by £2.8bn.
The upmarket wealth manager has agreed to buy rival fund manager Jupiter’s private client and charity investment management business for £43.1m, assuming all of its assets are moved over.
It has also snapped up the London operations of Tilney Investment Management’s private client business from Deutsche Bank for £14.3m.
The two deals will boost Rathbones’ total funds under management by 12.7 per cent to £24.8bn.
It also raised £24.4m after placing 1.35m shares at 5p each yesterday, giving it a war chest for future deals. The group last placed in shares in 2012, raising £24.2m.
Rathbones’ new chief executive Philip Howell, who took over from long-standing boss Andy Pomfret at the beginning of last month, said the two acquisitions were “a great fit” for the company.
”We expect to see more acquisition opportunities in the private client industry in the short to medium term. Raising capital now will give us flexibility to continue to take advantage of similar opportunities as they arise,” he said.
Large banks such as Deutsche have been spinning off their private wealth management divisions as they seek to shrink their operations.
In 2012, Bank of America Merrill Lynch sold its wealth management business to Julius Baer, while Deutsche precipitated yesterday’s deal by selling its regional Tilney operations to private equity group Permira last month.
Newton Investment Management, part of BNY Mellon, also sold its private client division to Standard Life Wealth last year.
The Jupiter acquisition is expected to be completed in the third quarter of this year, with the fund manager’s head of private clients Andrew Clark and his 28 staff moving across to Rathbones.
BEHIND THE DEAL
CANACCORD GENUITY | MARTIN GREEN
1 Managing director of corporate broking Martin Green led the placing for Canaccord alongside head of sales Mike Cuthbert, nicknamed “Mr Rathbones” for his long relationship with the firm.
2 Green joined Canaccord in 2011. His prior career included spells at Cenkos and New Smith, but most of his career was spent at Smith New Court and then Merrill Lynch, which bought the stock broker, in various investment banking roles within the financial institutions group.
3 Green is an avid skier and when not at work he prefers to spend the winter season carving down the slopes in France’s three valleys (Meribel, Courchevel and Val Thorens).
Law firm Addleshaw Goddard and Canaccord advised Rathbones on the Jupiter acquisition, while investment bank Evercore were the advisers to Jupiter. Peel Hunt acted as joint bookrunner, joint broker and agent to the placing alongside Canaccord. Quill acted for Rathbones as their PR adviser.