The largest announced deal this month was Industrial and Commercial Bank of China agreeing to acquire at least a 60% stake in the UK commodities and foreign exchange trading business of Standard Bank Group for a consideration between US$600m to US$700m. It was also announced that Legg Mason and affiliate Permal are to acquire Fauchier Partners, a European fund of hedge funds, from BNP Paribas Investment Services.
In wealth management, Towry secured £35m of new equity from AlpInvest Partners and Honeywell Capital Management, Jardine Lloyd Thompson completed the purchase of Alexander Forbes Consultants & Actuaries for £17m, Tenet acquired Employee Benefits Corporation, Jones Sheridan Financial Consulting acquired Mike Taylor Financial Services, AFH Financial Group acquired Seager Financial Consultancy and Racol Financial Services, and Threesixty sold its 15% stake in Sense to management. In discretionary investment management, Saltus Fund Management acquired Mercater Capital Management, its second acquisition in 2012.
UK groups were also active abroad. Schroders acquired STW Fixed Income Management with US$12bn AUM and Aviva sold its US life and annuities business to Athene Holding for $1.8bn (£1.1bn).
There was a flurry of activity in the discretionary investment management space with Quilter having agreed to acquire Cheviot Asset Management to form a combined entity with over £12bn under management, Rathbones buying Taylor Young and Brooks MacDonald acquiring Spearpoint for a maximum of £45m.
Similarly, the IFA sector saw several deals being concluded, albeit on a smaller scale, including Wealth at Work acquiring a stake in Marshall Zoing, Campbell Insurance Services acquiring RSJ Financial Planning, Denehall Wealth Management buying Broome Financial Planning, Facts & Figures Financial Planners acquiring Insurance Services for Business and BRB Wealth Management purchasing Keith Tudor Financial Services and Anthony Tabbinor Financial Advisers. In the corporate market Broadstone Corporate Benefits acquired specialist pension administration firm Pope Anderson.
Other areas of the investment sector were also active. Premier Asset Management bought six multi-asset distributor influenced funds from IFAlliance and it was disclosed that Lowes Financial Management is in talks with WH Ireland to acquire the structured product platform SPGO.
It was also rumoured that Legal & General moved one step closer to completing the buy-out of Cofunds, the investment platform and Suffolk Life, a subsidiary of Legal & General, acquired 1,700 SIPP plans from Pointon York and discount broker Clubfinance acquired Sipp provider Intelligent Money’s direct-to-consumer business.
This month saw several deals in the wealth management market, including Rathbone Brothers buying a stake in Vision Independent Financial Planning and Castle Investment Solutions, Caerus Capital Group agreeing to acquire the IFA network of Paradigm Partners, AFH acquiring Chartwell Associates, Sanlam Private Wealth acquiring three client books and Alliance Trust Savings selling its SIPP business to Curtis Bank. Also, the IFA consolidator Perspective Financial Group put itself up for sale and Quilter confirmed that it is in advanced talks to acquire Cheviot Asset Management. Among investment managers, XCap Securities acquired Hume Capital and City Financial acquired the asset management arm of Eden Financial.
There was also activity in other parts of the investment sector including Jardine Lloyd Thompson buying the employee benefits business of Alexander Forbes and Asset Match, the electronic platform for trading shares in private companies, acquired Sharemark, the online stock market for smaller listed and non-listed companies. It was also rumoured that LV= is interested in acquiring the retirement income specialist, MGM Advantage, as part of MGM’s bid to raise £200m.
The wealth management sector showed plenty of activity with Truestone Asset Management acquiring Argent Personal Financial Managers; Canaccord Financial buying the wealth management arm of Eden Financial; Principal Holdings, now renamed Sanlam Private Investors, acquiring Iain Nicholson Investment Management, a fellow discretionary portfolio manager; and Clarion acquiring SDJ Private Clients, a provider of both financial planning and discretionary investment management services.
The high level of activity also extended to the IFA sector where AFH Financial Group bought Elgar Financial; Mazars bought Citrus4Benefits and Surf & Consult; Perspective Planning merged with Transcend Wealth; European Wealth acquired Ernest Noad & Associates; and Brooks Macdonald acquired Park Street London Limited.
In the trading sector, the Swiss commodities trader MRI Trading bought the London-based metals trader LN Metals. Overseas interest was also evident in the private equity sector where Asian and Middle Eastern investors in the funds managed by CVC Capital Partners bought a 10% stake in CVC itself.
In fund management, Alliance Trust Investments acquired Aviva Investors’ Sustainable and Responsible Investment funds business, managing some £1.2bn of funds, and Saltus acquired the discretionary fund manager, Montague Capital. Aviva also entered into a conditional agreement to acquire an 81% shareholding in Professional Advisory Holdings, a specialist financial planning advisory business in Singapore.
In the IFA market, OCM Wealth Management merged with Bluegrove Financial Planning and Sanlam Private Wealth continued the consolidation of the market with the acquisitions of Oakdene Practice, Parkgate Financial Solutions, Libra Associates and English Mutual. Similarly, Succession completed the acquisition of five firms: Smart Wealth Management; Campbell Dallas Financial Services; The Financial Management Group; Westminster Financial Planning and Westpoint Financial Consultants, and Perspective Financial Group acquired the client bank of Kings World Walder. In a vertical integration move, Calkin Pattinson merged with James Hambro & Partners, the discretionary portfolio manager.
Elsewhere in the sector, Chase Templeton, the private medical insurance broker, acquired Quotter Ltd, Synopsis City of London Group sold its investment in FX Capital Group, a foreign exchange brokerage, and private equity group, TDR, was tipped to buy MGM Advantage, the enhanced annuity mutual, which was rumoured to be looking to raise up to £200m.
In the fund management sector, Man Group has completed its acquisition of hedge fund research and investment specialist FRM Holdings, making it the largest independent non-US based fund of hedge funds, and Henderson Group announced that it has acquired Horizon Investment Management France SAS, a privately owned French retail property asset management business.
The consolidation in the stockbroking sector continues with the merger of Singer Capital Markets and N+1 Brewin, the Spanish-based business that was formed by the acquisition of Brewin Dolphin’s corporate advisory and broking businesses by N+1 Group earlier this year.
Similarly, the IFA sector saw a number of deals including Jones Sheridan Financial Consulting England agreeing to acquire the financial services arm of Brown & Corbishley, Wingate Financial Planning acquiring Francis Townsend & Hayward and Foster Denovo being set to acquire the corporate advice arm of wealth manager Barker Poland.
It was also a relatively quiet month in the investment sector but with some notable deals involving international groups with significant operations in the UK, including KKR agreeing to buy Prisma Capital Partners, the fund of hedge fund manager which manages $7.8bn of funds, and it was reported that Goldman Sachs is close to sealing a deal with State Street over the sale of its hedge fund administration business which would create the largest administration services provider to hedge funds worldwide.
Palmer Capital reached an agreement on the terms of an offer for Invista Real Estate Investment Management Holdings, trumping Internos Real Investments’ previous offer for the business. AFH Financial Group acquired Specialist Solutions, another wealth manger and financial planner, and Alliance Trust sold its SSAS business to Xafinity.
M&A activity in the fund management industry was mainly driven by several banking groups’ plans to divest non-core assets. Lloyds Bank sold its majority stake in the AIM-listed Invista Real Estates manager to Internos Real Investments for £34m. Barclays announced the proposed sale of its entire 19.6% shareholding in BlackRock Inc and Credit Suisse has put JO Hambro Investment Management up for sale.
The Wealth Management sector saw continued consolidation with Perspective Financial Group making three small acquisitions. Shipman Financial Planning acquired CMC Financial Services, another IFA, and Wells Capital Investment Solutions, a provider of discretionary investment management services, acquired Reeves Investment Management. It was also announced that In-Partnership IFA network is set to acquire The Whitechurch Network, another IFA network. Hornbuckle Mitchell, the Sipp and SSAS provider, announced it is in final stage talks with three potential investors and has not ruled out a sale of the business.
British groups in the investment sector continued to make acquisitions abroad, including RIT Capital Partners, the listed investment trust that is minority-owned by Lord Rothschild, which bought a 37% stake in Rockefeller Financial Services. Tullett Prebon, the provider of inter-dealer brokerage services, reached an agreement to acquire Elevation LLC, an equities derivatives inter-dealer broker in the USA, for USD13m. Gottex Fund Management reached an agreement on the acquisition of Hong Kong-based Penjing Asset Management which manages some USD4.3bn of assets. Man Group Plc agreed to acquire FRM Holdings Ltd, a global hedge fund research and investment specialist based in the Channel Islands, for a contingent consideration up to c. £52m.
In fund management, Liontrust Asset Management completed its acquisition of Walker Crips Asset Management after final shareholder approval and Northill Capital announced that it has agreed to acquire a majority interest in Securis Investment Partners LLP, the London-based investment manager specialising in insurance risk-related assets. It was also rumoured that Goldman Sachs is in late-stage negotiations over the sale of its Petershill Fund, which owns stakes in hedge fund managers, and that Asset Management Finance is the preferred bidder.
Wealth management saw Rathbone Brothers acquire RM Walkden & Co, a provider of investment advisory, taxation and financial consultancy services and RMT Financial Management, provider of investment advisory services, being subject to an MBO. Perspective Financial Group, the IFA consolidator, announced the acquisition of Financial Connection. Capita announced the £50m acquisition of employee benefits consulting business Bluefin Corporate Consulting. The founders of Blevin Franks sold privately to two industry veterans.
British companies in the investment sector were also busy investing abroad: CVC Capital Partners bought AlixPartners in the USA, Schroders announced that it is to acquire a 25% stake in the Indian asset manager Axis Asset Management Company from Axis Bank and ICAP Plc acquired VIP Commodities, a US cotton options broker.
In fund management, Union Bancaire Privee agreed to acquire Nexar Capital Group, the fund of hedge fund group, and Liontrust Asset Management agreed to acquire Walker Crips Asset Managers for £12.3m. In private equity, HSBC sold a majority stake in its Middle Eastern Private Equity Fund Management business and Braveheart Investment Group acquired Neon Capital Partners, a provider of private equity funding services.
In the stockbroking arena there was continued speculation about a potential offer for Panmure Gordon after it announced the disposal of its loss-making US subsidiary.
The IFA sector was relatively subdued: Intrinsic bought Blueprint FS and Organisation, and Whitechurch Securities bought two IFA client banks adding £32m of assets.
Punter Southall Group took full control of PSigma Asset Management after buying out the remaining 50% of the fund management boutique. Eurofin Capital acquired NAU Capital, a multi-strategy hedge fund. Ingenious Asset Management acquired the managed funds division of Optima Financial, the fund management business of Turpin Barker & Armstrong. Aviva Investors announced that their sustainable and responsible investment team, with £1.1 billion AUM, is set to be sold off and Deutsche Bank continues the sale process for its asset management business.
Bunge Ltd, the American food conglomerate, agreed to acquire Climate Change Capital, the fund manager and advisory boutique, and Hong-Kong based First Eastern Investment Group acquired a minority stake in Sustainable Development Capital, a multi-disciplinary financial and investment advisory firm.
In the IFA sector, Giles Insurance Group sold CBG Financial Services back to the management that originally sold the business seven years ago and Saffron Building Society sold Saffron Independent Financial Advisers to Towergate Financial. Web Financial Services acquired Bryant Kesek Financial Services and Brilliance Financial Planning merged with Armstrong Financial. At the larger end of the scale, it was rumoured that several potential suitors are pursuing Bluefin, the IFA and corporate advisory group of Axa.
The Wealth Management space continued to be very active in January with Bridgepoint Capital agreeing to buy Quilter UK from Morgan Stanley, valuing it at roughly £180m. Jones Sheridan Financial Consulting acquired KF Garner Financial Consulting and Sanlam Private Wealth bought two more books of clients, from Brian D Thomas Financial Planning Services and George Ogniben. Antrams Financial Services acquired local Barrett Hussey Financial and consolidator Perspective also acquired Vivienne Shepherd.
RBS were rumoured to be selling Hoare Govett to the US investment bank Jefferies, which was subsequently confirmed in early February. Raymond James Financial Inc. acquired the remaining 25% stake it did not already own in Raymond James Investment Services from joint venture partner Killik & Co.
In the Fund Management arena Loudwater Trust sold its stake in City Financial Investment Company back to the company and the executive partners of venture capital trust specialist Matrix Private Equity announced that they are to buy out parent Matrix Group’s stake. The mutual specialist, Baxi Partnership, bought Camco Advisory Service and employee share scheme specialist RM2.