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In the Employee Benefits space, Mercer, the wholly-owned subsidiary of Marsh & McLennan Companies, announced that it had agreed to acquire Thomsons Online Benefits, the international benefits software business and Reward Gateway acquired the UK business of LogBuy, the voluntary benefits provider. Alexander Forbes sold its 60% interest in Lane Clark & Peacock (LCP) to the individual partners and funds managed by Inflexion Private Equity for £75.4m. Inflexion took a minority stake of £41m in LCP.
Yet again, there was also plenty of activity in the wealth management sector. Camellia divested most of the subsidiary Duncan Lawrie business: It reached an agreement to sell Duncan Lawrie Asset Management for £28m to Brewin Dolphin and the majority of Duncan Lawrie’s UK loans and certain of its Isle of Man loans were sold to Arbuthnot Latham & Co. for £42.7m. Nutmeg attracted an investment of £12m from an Asian bank, Taipei Fubon Bank, the second largest financial services firm in Taiwan. This followed £30m raised from Convoy, Hong Kong’s largest listed IFA firm, in November. Fairstone acquired Howton Financial Services and took a minority share in My Wealth Management, and it was rumoured that Bellpenny is pursuing EFG’s IFA arm.
Most of the action in the Investment sector this month was concentrated in the wealth management space. Schroders reached an agreement to acquire a stake in Benchmark Capital, the technology-led adviser support business, including an institutional funds platform, a chartered firm and a network of independent financial advisers. Arthur J Gallagher acquired Argentis FinancialGroup; St James’s Place acquired Ardu, trading as Premier Wealth Management; Old Mutual Wealth Private Client Advisers acquired JW Financial Planning; Tavistock agreed to acquire Price Bailey Financial Services for up to £3.6m; Newell Palmer acquired Boyack Meeks and Sensible Finance; Centurion Wealth Management joined forces with Wealthcare South West; McHardy Financial announced the acquisition of Fraser James Partnership; and Fairstone acquired minority stakes in Angela Murfitt Financial and Bankfield Financial Advisers.
In the life assurance market, international groups undertook disposals of offshore subsidiaries, including Prudential agreed to sell its South Korean company to Mirae Asset Financial Group for KRW170bn and Legal & General Group agreed to sell Legal & General Nederland Levensverzekering, its Dutch provider of adviser-led risk and investment-linked products and pension advice, to Chesnara for €160m.
Various technology-led propositions attracted capital for growth: Nutmeg raised £30m in new funding from Convoy Financial, Hong Kong’s largest firm of IFAs; CoInvestor, the alternative investment platform for sophisticated private investors, raised £1.1m; and SYNC Financial Technology, trading as Swanest, raised €750k from Philippe Gillion to develop the DIY investment proposition.
Elsewhere in the sector, HFF, the US provider of commercial real estate and capital market services, announced that it expects to launch its first UK operations via a proposal to acquire Leon Partners from Lotenno and Rowan Dartington, a subsidiary of St James’s Place, agreed to sell its international platform business, Ardan International, to RL360 Group for an undisclosed sum.
The asset management industry saw a series of deals in October. Most notably, Henderson Global Investors and Janus Capital announced the intention to merge in an all-share deal worth £5bn to create a $320bn global asset manager. The combined group, which will be renamed Janus Henderson Global Investors, will base its two co-CEOs in London and apply for a primary listing in New York and retaining the listing in Australia but relinquish the listing in London.
In a similar cross-Atlantic context, SVG Capital, the UK-listed private equity fund, signed an asset transfer deed with the US-based international private equity investment group, HarbourVest, for the sale of its entire investment portfolio for approximately £807m. It will enable SVG Capital to return what the board expects will amount to a total of £1,118m to shareholders through a series of tender offers and the winding up of the company.
Man Group entered into an agreement to acquire the entire issued share capital of Aalto Invest Holding, the ultimate Swiss holding company of Aalto Invest headquartered in London, with offices in the USA and Switzerland, a provider of asset focused investment management services. Under the terms of the acquisition Man Group will pay $25m at completion and an earn-out of up to $27m in a mixture of cash and shares. Man Group will pay a further earn-out of up to $180m in aggregate.
Premier Asset Management Group floated on AIM, raising gross proceeds of £63.7m and valuing the company at approximately £140m and Rathbone Brothers, the provider of investment management, banking, trustee, financial advisory and corporate administration services, completed a placing of up to 2,224,210 shares, raising up to £38m to address deficits in their staff defined benefits pension schemes.
In the wealth management sector specialising in high net worth individuals, Cazenove Capital Management, the wealth management arm of Schroders, reached an agreement to acquire the wealth management business of C. Hoare & Co. with c. £2.2bn of AUM. Stonehage Flemingacquired FF&P Wealth Planning, a strategic partnership between Asquith & Partners and Fleming Family & Partners, and Brown Shipley acquired Manchester based Roberts Partnership with £450m of client assets.
Elsewhere in wealth management, Leeds-based financial planning firm The Private Office (TPO) acquired City wealth manager PQR Financial Planning to create a firm with £1bn in AUA. European Wealth Group entered into an agreement to acquire the business and certain related assets of Towry Asset Management (formerly Ashcourt Rowan Asset Management) from Tilney Bestinvest Group for a maximum consideration of £1m and an additional £200,000 for the benefit of a loan owing to the seller. AFH acquired the assets of CRS Financial Planning and Fairstone Group agreed to buy RGA IFA.
In the other areas of the Investment sector, Interactive Investor acquired TD Bank Group’s European direct investing business. Embark Group acquired the investment research arm, The Adviser Centre, from City Financial and ICAP, the interdealer broker, acquired Abide Financial, a provider of regulatory reporting services.
The life company sector provided further action in September with Deutsche Bank agreeing to sell its Abbey Life Assurance Company for £935m to Phoenix Group, the closed life assurance fund consolidator.
There was also plenty of activity in the private equity space with the fund-of-funds, HarbourVest, making a £1bn all-cash offer for SVG Capital, the UK-listed private equity investor. The bid was subsequently rejected by SVG which announced plans this month to sell half its portfolio to Pomona Capital and Pantheon Ventures before two new bidders for SVG emerged in the form of Goldman Sachs and Canadian Pension Plan Investment Board. Also in private equity, the venture capital firm Albion Ventures agreed to acquire OLIM Investment Managers, the UK equities fund manager with £490m under management, from Close Brothers Group for an undisclosed sum.
Elsewhere in asset management, the Canadian firm Fiera Capital announced it had bought London-based Charlemagne Capital, the emerging markets specialist with $2bn AUM, for £40.7m and said it is in talks with several other targets.
In the wealth management sector it was rumoured in the Evening Standard that Schroders is thought to be close to buying Benchmark Capital for £130m. Benchmark provides wealth managers and IFAs with sales platforms and support services through brands including Fusion Wealth and Enable. LJ Group Partnership acquired Guggenheim Investment Advisors in Hong Kong, a provider of wealth management and family office services, from Guggenheim Partners. Succession Group acquired Birmingham-based Clay Rogers & Partners in a deal potentially worth over £10m through a mixture of cash and shares. Clay Rogers has £450m of assets under advice and has been working with Succession since 2013. MFM Holding, the holding company of MFM Investment which trades as MoneyFarm, an online wealth management platform, secured an undisclosed investment from Allianz, the insurance, banking and related financial services group. European Wealth purchased Gibraltar-based asset manager Cimco Partners.
In the pensions market Praemium, the financial planning and investment platform technology provider, agreed to acquire Wensley Mackay. STM Group entered into an agreement to acquire London & Colonial for a consideration of up to £5.385m and Mattioli Woods acquired MC Trustees for up to £2.2m.
Other areas of the Investment sector were also busy including stockbroker WH Ireland confirming that Kuwaiti European Holdings took a 23% stake in the company and Miramar Corporate Finance merged by way of an acquisition with DNA Corporate Finance and changed name to Elysium Corporate Finance. GCM Prime, the institutional broker, acquired CapMar Financial, the assets of the institutional foreign exchange, CFD business and technology solutions of Capital Markets Services UK and AXA PPP agreed to acquire the charity Age UK’s telecare business Aid-Call UK which provides personal alarm services to 50,000 people throughout the UK.
The large life companies were busy in August. Aegon agreed to buy Cofunds, the largest investment platform in the UK, from Legal & General Group for £140m, including the Investor Portfolio Service platform as well as Cofunds’s retail and institutional business. Old Mutual agreed to sell its Italian wealth arm, which manages €7bn of investments, to Cinven-owned ERGO Italia for €278m and Old Mutual Wealth bought Beaumont Robinson, an IFA with over 850 clients and around £250m in assets under advice.
Also in wealth management, Harwood Wealth acquired Network Direct in a deal worth up to £4m, including 107 advisers nationwide and assets under advice of around £1bn, and Succession Group bought Lewis Chambers with £200m of assets under advice. Ascot Lloyd Financial Services acquired Harvard Financial Management, trading as Harvard Pension Specialists, and Hammond Raggett Holdings bought Beechwood (Pensions & Investments). Wealthify, the start-up provider of online investment services, announced that it is seeking to raise £1m through crowd funding.
Elsewhere in the sector Global Reach Partners acquired FC Exchange, the international money transfer and payment solutions provider, with the backing of its private equity investor Inflexion Private Equity Partners. Kline Hill Partners, the specialised secondary investor, reached agreement on the terms of a recommended cash offer for Private Equity Investor, valuing the business at £19.9m and Arthur J. Gallagher & Co, through its subsidiary Risk & Reward Group, acquired Orb Financial Services which provides consulting services on employee benefits and brokers insurance. INTL FCStone, the security and commodity contracts brokerage firm, acquired the London-based oil desks business from ICAP, a transaction being carried out in the wake of the phase 2 investigation by the Competition and Markets Authority of Tullett Prebon’s anticipated acquisition of ICAP’s voice/hybrid broking business.
In one of the largest transactions in the SIPP and SSAS markets this year, Rowanmoor Group was acquired by Embark Group to create a combined business with £8.1bn of assets under administration for over 70,000 pension, investment and consultancy clients. The sector saw further consolidation with Curtis Banks Group, via its subsidiary Suffolk Life Pensions, acquiring the SIPPs business of European Pensions Management (in administration), Talbot and Muir buying Attivo Group’s SIPP and SSAS administration business and Heritage Pensions taking over the SIPP administration business of Brooklands Pensions. Further in the pensions space, Legal & General acquired a minority stake in auto-enrolment pension provider Smart Pension.
The wealth management sector was also active with Fidelius Financial Holdings buying Money Wise Independent Financial Advisers excluding the Cambridge business, which has been renamed Dartington Wealth Management. Standard Life agreed to acquire Jones Sheridan Holdings, Succession Group bought Caledonia Financial Planning for a total consideration of £2.5m, Gee and Watson investment and pensions acquired McEwan Wallace Wealth Management and Sanlam declared that it is selling £3.6m worth of shares in the Nucleus platform.
Other parts of the sector were mostly quiet except in interdealer broking where, in a move to expand its equity-derivatives business, BGC Partners agreed to acquire Sunrise Brokers Group, a specialist in exotic equity derivatives, for an undisclosed amount.
It was fairly quiet elsewhere in the sector but, in wealth management we saw the usual levels of activity. BP Marsh & Partners acquired an additional 8.02% stake in LEBC Holdings from a number of legacy shareholders for approximately £1.91m, equivalent to a value of £23.8m for the entire share capital, bringing its total shareholding to 42.68%. Close Brothers acquired EOS Wealth Management with £300m of client assets and Succession Group acquired Maze Wealth.
Investec, the specialist bank and asset manager, raised £138m through a placing of 30.9m new ordinary shares, representing 4.99% of the company’s issued ordinary share capital prior to the placing, with new and existing investors to finance the repurchase of preference shares outstanding in the company. OM Asset Management agreed to acquire a 60% equity interest in Landmark Partners, a US provider of secondary private equity, real estate and real asset investment services with c. $16bn AUM, for approximately £240m in cash with the potential for an additional payment in the future.
Several deals in the asset management industry hit the headlines this month: RIT Capital Partners approached Alliance Trust with an informal proposal for a merger of the two investment trusts to create a listed fund with a market capitalisation of over £5bn. GAM Holding, a Swiss-based provider of asset management services, announced plans to acquire Taube Hodson Stonex Partners LLP, the London-based asset manager of global and European-focused equities portfolios with £1.78bn AUM and Schroders reached an agreement with Brookfield Investment Management to acquire the US-based securitised products investment management team with more than $4bn in AUM.
Aegon, the Dutch multinational insurer, announced an agreement to acquire BlackRock’s UK defined contribution platform and administration business with £12bn of assets and 350,000 customers, strengthening its position in the UK workplace market with total AUM of around £30bn. Aegon also completed the divestment of its British annuities portfolio with the sale of its remaining £3bn annuity portfolio to Legal & General, covering about 27,000 in-payment policyholders. It followed Aegon’s sale of two thirds of its UK annuity portfolio, worth £6bn, to Rothesay Life last month.
In a similar partial exit from the UK market, the French multinational insurer,AXA, agreed to sell its investment, pensions and direct protection businesses in the UK, SunLife and Axa Wealth, to Phoenix Group Holdings, the closed life assurance fund consolidator, for a consideration of £375m. In addition, AXAreached an agreement to sell Portfolio Services, trading as Elevate, the wrap platform, to Standard Life, the UK savings and investment group.
Other areas within the Investment sector showed similar high levels of activity. The private equity fund, Baird Capital, invested in bfinance, a specialist provider of investment consultancy and manager selection advice to companies and institutional investors internationally. Netwealth, a start-up online wealth management firm, raised £6.5m from angel investors including Edward Bonham-Carter, Lord Green and Rosemary Leith. The London-based provider of corporate finance, securities and asset management services, Altium Capital, entered into a definitive all-share merger agreement with a GCA Savvian Group, the Japanese provider of investment banking services. Auto-enrolment pension provider,Smart Pension, bought a significant stake in data transfer technology firm Pensionsync. The fast-growing provider of financial education in the workplace,Wealth at Work, bought Farleigh Group, the holding company for the Affinity Group of companies, a Bristol-based national provider of financial education and advice services and Fairstone Group acquired Fairstone Financial Management (formerly First Financial Management) and Carleton Chambers.
The wealth management sector continued to be very active. As previously reported, Tilney Bestinvest, which is backed by the private equity fund Permira, agreed to buy Towry in a deal worth £600m which will create a nationwide wealth manager with over £20bn of AUM. The owner of Brown Shipley, KBLEuropean Private Bankers, agreed to purchase the Anglo-Dutch private bank Insinger de Beaufort from BNP Paribas. Insinger de Beaufort’s London team, who advises on £1.5bn of client assets, will be integrated into Brown Shipley’s organisation. Private equity firm, Synova Capital, invested £25m in Fairstone Group (formerly Moneygate Group) to become the lead investor in the group. Several early stage investors realised their investments while Committed Capital, Northstar Ventures and two family offices have retained their stakes.
Standard Life, via Pearson Jones, agreed to acquire Baigrie Davies & Co. with c. £400m of client assets. Succession Group acquired Michael Moor Life & Pensions with £150m of AUM and Courtiers bought JRH Asset Management for over £1m, an IFA focused on high net worth individuals with c. £62m in client assets. It is the first of three impending acquisitions the company is hoping to complete soon.
In the other areas of the Investment sector, Liontrust Asset Management agreed to acquire the European income fund management business of Argonaut Capital Partners for £4.47m and St James’s Place acquired Technical Connection, the technical support provider for financial planners.
There were also rumours that the auction for Abbey Life, the UK-based life assurer being sold by Deutsche, is attracting interest from Swiss Re, Phoenix and Anbang and that it is likely to value the business at over £1bn. It was also suggested that Standard Life was bidding for Axa Elevate, the investment platform with almost £10bn of UK assets, which was indeed confirmed after the end of the month when it was announced that an agreement had been reached between the groups. This follows shortly after Axa’s sale of its Isle of Man-based investment bond business to LCCG UK.
The sector was very busy in March with several high-profile deals being announced. First came the news that Old Mutual will split into four different groups by the end of 2018: a UK-based wealth manager; a US asset manager; an African insurer; and a South African bank. A few days later Société Générale announced that it had agreed to buy Kleinwort Benson Wealth Management, the UK and the Channel Islands wealth management entities of BHF KB, to integrate them into Société Générale Private Banking and form one of the largest wealth managers in the UK with almost £20bn of client assets and over 1,000 staff. Also, LGT Private Banking, the family office of the Princely House of Liechtenstein, took a majority stake in Vestra Wealth, the wealth manager formed by David Scott when he broke away from UBS and took a team of 16 staff with him eight years ago which has now grown to 58 partners and £5.2bn AUM.
Elsewhere in wealth management, persistent rumours about Tilney Bestinvest having emerged as a favourite to buy Towry were confirmed shortly after the end of March. The two private equity-backed groups agreed a deal worth £600m which will create a nationwide wealth manager with over £20bn of AUM. Harwood Wealth Management, which had previously acquired Wellian Investment Solutions and Meon Valley Financial Planning, raised a total of £13.5m, of which £10m represented new equity, and floated on the AIM market for a total value of £45m. Standard Life bought Almary Green, an IFA with £400m of assets under advice, Tavistock Investments agreed to acquire Abacus Associates for £5.2m in a combination of cash and shares and the senior management of PSP Wealth Management completed a £3m buy-out of the company.
In the IFA network market, AFH Financial Group approached Lighthouse Group and made an offer for £17.4m which was rejected by the board of Lighthouse. There were also rumours that the private equity fund Permira, who invested in Tilney Bestinvest in 2014, was considering acquiring Aviva’s 47% stake and a group of small shareholders’ combined stake of 6% in Tenet, the IFA network.
Aspect Capital, a computer-driven hedge fund in London, acquired Auriel Capital Management, a fellow hedge fund with $1.4bn AUM in currency strategies, Enterprise Ventures Group, the provider of equity and loans to small businesses, was acquired by Mercia Technologies, a technology investment specialist, for up to £11m plus net cash and Waverton Investment Management acquired the European and Southeast Asian equity manager 2CG Senhouse Investments.
Clearwater Corporate Finance announced the merger with two of its long standing partners in Europe, Advizer in Denmark and IMAPLynx in Spain and Portugal. It also acquired @Visory Partners in Germany and Easton Corporate Finance in France to create a pan-European group operating under the Clearwater brand and will be headquartered in London.
The advisory sector was active in February, including Alpha Financial Markets Consulting, a leading consulting firm in the asset management industry, being sold by the private equity fund Baird Capital and being bought by another private equity fund, Dunedin, in a transaction valued at £80m. Mercer, the consultancy subsidiary of Marsh & McLennan, acquired The Positive Ageing Company, a provider of advisory services to help employers and employees manage the financial, care and health impact of ageing, and FRP Advisory, the specialist adviser on financial and operational uncertainty, acquiredLitmus Advisory, a provider of debt advisory services. Stifel Nicolaus, the investment bank, acquired ISM Capital, a firm specialising in structuring and placement of equity-linked securities, high yield debt, leveraged loans and private debt.
In the wealth management sector there was speculation that Tilney Bestinvest was planning a bid for Towry. It was denied by Tilney Bestinvest who subsequently agreed to acquire Ingenious Asset Management, a discretionary manager with £1.8bn of client assets, from the Ingenious Group.Greyfriars Asset Management acquired the independent financial services division of Chesham Insurance Brokers.
Elsewhere in the asset management area, Allianz’s asset management subsidiary agreed to acquire Rogge Capital Partners, the fixed income specialist, from Old Mutual. London & Capital sold Adviser Solutions, the DFM model portfolio business, to Momentum Global.
Investment platforms and technology were common features in many of the transactions in the Investment sector in January, including US private equity fund, FTV Capital’s, investment in True Potential, the fast growing integrated investor and wealth management technology platform serving advisers and retail clients. FTV Capital is investing in a significant minority, valuing True Potential in excess of £150m and allowing its early investors to be rewarded as well as helping to expand the technology platform further with additional advisers and new products.CMC Markets, the provider of online financial trading business for retail clients, specialising in Contracts for Difference and Spread Bets derivative products, announced its intention to proceed with a flotation on the main market of the London Stock Exchange. It has beenspeculated that it could value the business up to £770m when it is expected to be listed in February.
AJ Bell, the online investment platform and stockbroking provider, agreed to acquire Indexx Markets, a small London-based investment management business that designs investment products and its group companies, Allium Capital, which operates a range of investment funds, and Mansard Capital, which provides investment management services, giving AJ Bell discretionary permissions as well as the ability to launch its own funds and build new investment solutions for financial advisers. In a similar move, the new online advice business eVestor agreed to acquire the financial planning firm Postcard Planning.
Legal & General sold Suffolk Life to Curtis Banks for £45m. It will make Curtis Banks the second largest independent SIPP provider in the UK with c. £18bn of assets under administration.
The IFA sector continued to be active with Fairstone acquiring a significant stake in Avidus Scott Lang with £350m of client assets under advice and Succession Holdings acquiring four more IFAs with combined client assets under advice of around £400m for a total of £9.5m: TMS; Facts Financial; Firth and Scott; and Carson Associates.
Investec sold the discretionary arm, Williams de Broe Private Investment Management, to Bellecapital as part of the Swiss company’s move to expand its London business, and private medical insurance consolidator, Chase Templeton, acquired Health Equity Solutions and Caledonian Health Solutions.