UK's Brooks Macdonald Agrees To Buy Channel Islands Wealth Manager

Tom Burroughes

14 April 2014

UK-listed , the wealth management firm, has acquired Jersey-based DPZ Capital Management for an initial sum of £5.7 million ($9.53 million), a deal that boosts discretionary funds under management by £360 million to a total of £6.04 billion.

The acquisition has been carried out by Brooks Macdonald’s wholly-owned subsidiary, Brooks Macdonald Asset Management (International) Ltd, from DPZ Holdings Ltd, according to a statement today.

The deal is being done through an initial consideration of £5.7 million, made up of £3 million in cash and the issue of New Ordinary Shares in the Group at a value of £2.7 million. The total consideration payable will not exceed £13 million, which includes around £1 million of net current assets.

The UK’s asset and wealth management industries have seen a number of merger and acquisition deals in recent weeks and months, driven by a desire for economies of scale by some firms as they seek to build market reach and deal with rising regulatory burdens.

Explaining the deal, the statement noted that DPZ was founded in 2007 and is described as managing a range of distinct investment strategies founded on its core competencies: asset allocation, manager selection, fixed interest and credit investing, and equity selection. Funds under management, at 31 March 2014, stood at around £430 million of funds, £360 million of which is managed on a discretionary basis.

Should the full value of DPZ funds under management transfer to BMI, based on their value as at 31 March 2014, the consideration would be, in total, £10.8 million (excluding net current assets).

"The group’s stated strategy has been to build on the successful integration and growth of its international division, BMI, which was acquired in 2012, with further expansion of the international team and its capabilities, thereby strengthening its offering and accelerating its growth rate. Since acquisition, BMI has grown its funds under management and has increased the size of its team by 15 staff. The acquisition of DPZ is consistent with furthering this growth strategy,” Brooks Macdonald said.

“The acquisition will increase the group’s international presence significantly, with an increase in discretionary funds under management managed out of the Channel Islands of over 50 per cent,” it said.

“As a result of the acquisition, the group will be welcoming to BMI a talented and committed team of professionals with extensive experience. The combined business will be located at BMI’s existing Jersey offices and will be branded as BMI,” it said.