Rathbones has partnered up with Investec’s wealth arm today in a move which will create one of the UK’s top money managers with £100bn assets under management.
In a statement this morning, bosses at the two firms said they had struck an £839m deal for an all-share combination of Rathbones with Investec Wealth & Investment Limited (W&I) to create a new “enlarged Rathbones Group”.
The terms of the deal will see Rathbones shares issued in exchange for 100 per cent of Investec W&I UK’s share capital. Investec Group will become a minority shareholder in the newly enlarged Rathbones Group, which will remain as an independent listed firm operating under the same brand.
The combined business will be run out of Investec’s Gresham Street UK headquarters.
In a statement, chair of Rathbones Clive Bannister said the deal will create the “UK’s leading discretionary wealth manager with approximately £100bn of funds under management and administration”.
Rathbones chief executive Paul Stockton, who will lead the new firm, told reporters this morning that volatility in the market over the past 12 months had driven an opportunity for consolidation.
“I think it is about an opportunity to grow more together. And secondly, I think it’s recognising that as a business model, we will be subject over the next five years to an inflationary environment, with very limited opportunity to pass on any pricing increases,” he said. “So inevitably, that’s going to drive a degree of consolidation in the sector more generally.”
Stockton did not rule out job cuts as part of the deal and told reporters that “there will be obviously some some changes to make.”
The enlarged Rathbones Group will continue to be chaired by Clive Bannister. Investec W&I UK boss Iain Hooley will also sit on a board made up of an experienced leadership team from both businesses.
Fani Titi, Investec Group chief said the tie-up “brings together two businesses which have a long-standing heritage in UK wealth management and closely aligned cultures”.
“The strategic fit of the two businesses is compelling with complementary strengths and capabilities to enhance the overall proposition for clients,” he added.