Rathbone Brothers, a UK-based fund and wealth manager, is on the lookout for acquisitions after it announced robust profits for 2004. Profit...

Rathbone Brothers, a UK-based fund and wealth manager, is on the lookout for acquisitions after it announced robust profits for 2004. Profit before tax rose by 32 per cent to £26 million ($49.7 million). “We are definitely looking at acquisitions,” Mark Powell, chairman of Rathbones, told WealthBriefing. “But of course any acquisition would have to fit with Rathbone’s cultural.” Rathbones is currently seeking to buy the Leeds-based asset manager Rensburg, although the South African financial firm Investec, through its London-based subsidiary Carr Sheppards Crosthwaite, is also in the race to buy it. Rensburg recently turned down a revised offer from Rathbones. Mr Powell was not willing to comment on the potential acquisition of Rensburg, although he said it would make an excellent fit with Rathbones and they were prepared to play a waiting gain if it was necessary to win the deal. An acquisition was viewed by Mr Powell as a way of partly boosting the staff without incurring many of the difficulties of hiring teams from the competition. “Employment practices, like restrictive covenants, often make it difficult to recruit the right staff. Also, I’m not convinced that managers always bring as big a book of business that they might say they will when they join,” said Mr Powell. Asked about whether Rathbones itself might be an acquisition target, Mr Powell said the current ownership structure of the Liverpool-based firm might deter potential bids. “Thirty per cent of the staff—and this is spread evenly through the firm—own shares in Rathbone, which creates a partnership culture.” Mr Powell said that net new money last year rose by £800 million ($1.5 billion), with much of that coming through a very successful year in the firm’s unit trust (mutual fund) business. Total funds under management rose by 13.2 per cent to £7.7 billion in 2004. Funds under management in Rathbone Unit Trusts increased by 72.2 per cent in 2004 to £818 million. Segregated portfolio funds under management rose by 9.1 per cent, according to Mr Powell.