M and A

UK Wealth Manager Bulks Up With Channel Islands Acquisitions

Tom Burroughes, Group Editor, London, 16 November 2012

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London-listed wealth and investment management firm, Brooks Macdonald, said today it has agreed to buy Spearpoint Limited and Spearpoint Retirement Services Limited, Jersey- and Guernsey-based discretionary fund management firms.

London-listed wealth and investment management firm, Brooks
Macdonald, said today it has agreed to buy Spearpoint Limited and Spearpoint
Retirement Services Limited, Jersey- and Guernsey-based discretionary fund
management firms.

Brooks Macdonald will initially pay around £23.1 million (around
$36.7 million) in a mixture of cash and equity; there will also be payment of a
deferred consideration, in cash in November 2014. If the value of Spearpoint’s
discretionary funds under management were to remain at around current levels,
the payment will be about £4 million.

However, based on growth projections for Spearpoint’s
discretionary funds under management over the period to November 2014, Brooks
Macdonald expects to pay an additional approximate £5 million of deferred
consideration over and above the £4 million figure, it said in a statement.

The deal comes shortly after the UK wealth management market saw the
merger of UK-based Quilter and Cheviot Asset Management, while a few weeks ago,
Switzerland-based Falcon Private Bank bought the London-based Clariden Leu
business from Credit Suisse. Recent events, analysts say, suggest there will be
a continued flurry of M&A activity among mid-tier and smaller wealth houses
to obtain economies of scale in a tight-margin environment.

The Brooks Macdonald deal is expected to be completed on 19
November. 

A spokesperson for Brooks Macdonald said there will be no redundancies as a result of the deal - the firm has no offices at present in the Channel Islands so there is no duplication of roles. At present, Spearpoint employs 54 staff, while Brooks Macdonald has 282 (as at June 2012).

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