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Deals Of The Day: The Latest In Wealth Management M&A - Kingswood, Manhattan Harbor Capital

Editorial Staff 29 May 2019

Deals Of The Day: The Latest In Wealth Management M&A - Kingswood, Manhattan Harbor Capital

The latest mergers and acquisition activity in the world's wealth management sector.

UK-listed wealth management house Kingswood has acquired a stake in Manhattan Harbor Capital, giving it a foothold in the US market. The acquisition of the 7 per cent interest in the US firm is subject to regulatory clearance.

In due course, Kingswood would have the freedom to boost its stake to 20 per cent, it said in a statement today. Kingswood would only boost its stake if the resultant transaction was below the thresholds of a reverse takeover, as defined by London’s AIM market listing rules for firms. Also, certain related parties of Kingswood have an existing 20 per cent interest in Manhattan Harbor with the option to acquire a further 5 per cent, it said.

The acquisition is being carried out by the firm’s wholly-owned US subsidiary, Kingswood US Holdings, for an initial sum of $525,000, made up of cash and shares.

“The acquisition creates an exciting new strategic partnership for Kingswood to scale and cross-sell its services internationally,” the firm said.

Manhattan Harbor is a holding company with operations in New York and Atlanta that will acquire, consolidate and manage independent broker-dealers and registered investment advisors in the US. Manhattan Harbor is led by Michael Nessim and has 31 registered representatives and 35 employees in total.

“Michael is an experienced operator with a strong track record and we have selected him and Manhattan Harbor as our US strategic partner as we embark on our ambitious US expansion strategy,” Najib Canaan, Kingswood’s US CEO, said.

Manhattan Harbor recently announced that it has acquired a 90 per cent interest in FINRA-registered broker dealer, Benchmark Investments. Nessim has transferred his prior business and clients to Benchmark, and now operates as an independent, fully-licensed IBD, and will be immediately earnings accretive given that these revenues are in place.

Rationale
Kingswood said that acquiring this interest at an “attractive discount” relative to market reflects the desire of both parties to develop a “highly accretive global platform providing clients access to investment product and services in major US and UK markets”.

“The partnership enables Kingswood to gain a key, strategic foothold in the largest global wealth and investment management market,” it said.

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