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Ashcourt Rowan Buys UK Wealth Manager, Reports Six-Monthly Profit

Sandra Kilhof, Reporter, London, 16 December 2013

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The UK wealth manager Ashcourt Rowan, has secured a deal to buy rival firm UK Wealth Management, and announced profits of £0.9 million for the six months ended 30 September 2013.

The UK
wealth manager Ashcourt Rowan, has secured a deal to buy rival firm UK Wealth Management,
and announced profits of £900,000 ($1.47 million) - double the size of last year's £0.4
million - for the six months ended 30 September 2013, the group said in a
statement.

In addition to its underlying pre-tax profits, the group
also recorded total assets under management at £3.7 billion, of which £1.6
billion are discretionary or managed assets.

The positive results are in part due to the significant cost
savings achieved by the firm over the year’s first six months, bringing its operating
cost base down 6.5 per cent to £14.3 million.

This is despite the fact that the six-monthly results also
revealed a significant loss of £2.5 million before tax, driven primarily by
planned costs to complete the firm’s new change management programme.

“During this first half Ashcourt Rowan successfully
completed its change management programme and is now prepared for a period of
both organic and acquisitive growth,” said chief executive Jonathan Polin.

This growth will in part be fostered by the recently
acquired Generali Portfolio Management’s UK business, which, along with
other initiatives, is expected to provide additional asset inflows of more than
£300 million in H2.

Acquisition expands business significantly

More importantly, Ashcourt Rowan also announced that it has
entered into a conditional share purchase agreement with Duke Street General
Partner and certain Duke Street funds, to acquire UKWM for up to £14.25
million in cash.

As at 31 October 2013, UKWM had £1.3 billion in assets under
management, with annualised revenues of £8.8 million of which £6.6 million were
recurring.

The deal will expand Ashcourt Rowan’s combined assets under
management to more than £5 billion, with discretionary assets in excess of £2.1
billion.

“UKWM's business is complementary in terms of culture,
outlook, client base and office footprint, adding locations in the North of
England where Ashcourt Rowan was previously under-represented,” said Polin and
added that the deal will bring the firm’s number of employees to 77 financial
planning and corporate advisors.

“Our stated aim has been to have a separate division for
corporate solutions to support the work we are currently undertaking in
auto-enrolment. In acquiring UKWM we extend our group with specialist
individuals who have the expertise tools and resources to concentrate on the
delivery of solutions to the corporate SME market,” added Polin.

The acquisition, which is subject to regulatory approval
from the FCA, will increase the group’s national footprint so it now has a
network of 17 offices across England
and Scotland.
Cantor Fitzgerald Europe is acting as sole financial advisor on the deal.

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