Ending months of speculation, BNY Mellon, the US-headquartered banking group, is selling the UK-based private client business of Newton to Standard Life Wealth.

Ending months of speculation, BNY Mellon, the US-headquartered banking group, is selling the UK-based private client business of Newton to Standard Life Wealth, another UK firm.

The deal, which is subject to regulatory approval, is expected to close in the third quarter of this year and covers around 7 per cent of Newton’s assets under management, worth £3.6 billion (around $5.44 billion) and held on behalf of some 3,000 private clients.

Standard Life Wealth said in a statement that the purchase price for the Newton assets was a consideration of up to £83.5 million, the exact size of which is contingent on the value of assets ultimately transferred. It said it expects the acquisition to be accretive to earnings. 

Talk of a sale of Newton started last year. As recently as last week, it was rumoured that Standard Life was in exclusive talks to buy the business for a price of up to £90 million, although the firms did not comment when contacted by WealthBriefing on 15 February.

“The decision to sell the private client business was made after much thought and with the long-term future interests of all clients and staff at the forefront of considerations. Newton's overall business has evolved over the past several years to the point where private clients now make up just a small portion of our total assets under management. We believe that the interests of private client investors, including the delivery of the highest standards of client service will be better served in future by a business where this area is a core element of the overall company strategy,” Helena Morrissey, chief executive at Newton, said.

We are confident that Standard Life Wealth will offer our private clients and associated staff the best opportunity for ongoing success in future, through its commitment to the wealth management business. Newton in turn will now be focused more clearly on our core business of institutional and charity investment management, as well as fund solutions for the wholesale and retail sectors,” she added.

As a result of the move, Newton will concentrate on managing £28.9 billion of institutional assets, £15.7 billion of assets for pooled investment funds and £4.3 billon of charity assets, the firm said in a statement. The firm will continue to serve retail investors by acting as an investment manager to BNY Mellon-operated funds that are available to other wealth managers, it said.