Quilter-Cheviot Merger Gets Green Light From FSA

Eliane Chavagnon

21 January 2013

The Financial Services Authority has approved the previously-announced merger of Quilter and Cheviot Asset Management, although the two businesses will retain their separate brands until later this year, Quilter said in a statement today. Terms of the transaction remain undisclosed.

The UK-based firms will operate as Quilter Cheviot and have over £12 billion ($19.4 billion) in funds under management, comprised of £8.3 billion and £4.2 billion from Quilter and Cheviot respectively. Changes in ownership took place on 18 January, with Martin Baines now chief executive of both businesses and Quilter Cheviot Holdings.

Quilter has 388 staff based in 13 locations across the UK, Jersey and Ireland, while Cheviot has 141 staff based in London and Liverpool.

“The transaction is recognition of all we have achieved and provides us with far greater scale and geographic reach, and will enable us to enhance our client services and capabilities still further,” Michael Kerr-Dineen, former Cheviot CEO said when the merger was announced in November last year. Kerr-Dineen will join the holdings board of Quilter Cheviot and act as a senior advisor to the combined firm.

The move signals the end of Cheviot Asset Management as a stand-alone business, which it has been since its founding in 2006 by Kerr-Dineen. Meanwhile, last year Morgan Stanley Smith Barney (now Morgan Stanley Wealth management) sold Quilter to Bridgepoint, having initially sold it to Citigroup in 2006. Morgan Stanley then reacquired the unit in 2009 as a result of its joint venture wealth management deal with Citigroup, but it is understood that Morgan Stanley wanted to dispose of Quilter to focus on ultra high net worth clients.

The Quilter-Cheviot merger represents the latest in a string of wealth management M&A deals in as many months. In October for example, Swiss wealth management boutique Falcon Private Bank agreed to buy Clariden Leu (Europe), the wholly-owned London-based subsidiary of Credit Suisse Group. Earlier still, Julius Baer acquired the non-US wealth management arm of Bank of America Merrill Lynch (in related news, last week Julius Baer formed a global advisory committee of former Merrill executives to support the bank in integrating the business - view here).