The transaction gives Rathbones a much larger imprint in the UK's financial planning space - one that is particularly important at a time of intergenerational wealth transfer and when certain other wealth sector areas are becoming more commoditised.

The wealth sector mergers and acquisitions carousel took another spin with this week’s move by UK-listed wealth manager Rathbone Brothers to acquire CastleCo Limited, the holding company of the Saunderson House group. Rathbones is paying £150 million ($207.8 million).

Saunderson, which provides financial planning business in the UK, has £4.7 billion of funds under management. It is paying a total consideration of £150 million to funds advised by Epiris LLP and the management and employees of Saunderson House. Most of the transaction will be funded by surplus capital, plus a £50 million equity placing. 

This deal shows that Rathbones is determined to build more scale and, in particular, tap into the financial planning market. Four years ago, the firm’s £2 billion merger talks with Smith & Williamson ended without a deal. Instead, rival UK wealth firm Tilney consummated the deal with S&W at the end of last year; the firm has a mix of asset management and accountancy services.

“Saunderson House is a high-quality business with a strong desire to deliver leading wealth management services to clients over the long term, and it will add both scale and capability to Rathbones. Commonly shared values, and a resolute focus on delivering quality client outcomes, provide a firm foundation from which to take advantage of some exciting growth opportunities,” Paul Stockton, chief executive of Rathbones said. 

The acquisition is subject to approval by the FCA and is expected to complete in the third quarter of 2021.

Saunderson House is being advised by Fenchurch Advisory Partners and Macfarlanes and the Saunderson House management team is being advised by Eversheds Sutherland.