Market Monitor: Wealth check-up - Wealth management transactions step up.

(From Professional Wealth Management (PWM))

Byline: Ted Wilson

After several patchy years for wealth management deal flow, is now the time to bring private client businesses to market? Rumours of the accelerated potential for M&A activity in the wealth and asset management sector have not been exaggerated and the sweet spot for deal opportunities is in the region of GBP5bn (E7.3bn) to GBP15bn of assets under management.

The business models of these firms inhabit a twilight world-too small to be big and too big to be small. One recent example in the UK-a microcosm for transactions occurring on the Continent-is the GBP188m reverse offer by one private client investment manager, Rensburg, for another, Carr Sheppards Crosthwaite (CSC). CSC has GBP10.3 bn under management. Another has been the recent MBO of Tilney Investment Management, with GBP5bn under management. Meanwhile, there is the pending auction for the UK-based asset management business of Deutsche Bank. An undeclared slug of this business is private client funds.

Direct beneficiaries of this activity are the - currently - limited number of boutique corporate finance advisors working on the deals. One of the most ubiquitous so far this year has been independent corporate finance adviser Hawkpoint, which had a brief involvement in the CSC deal while acting for Rathbone Brothers on a counter-bid, and which is rumoured to acting for Deutsche Bank. This latter deal is expected to be worth some GBP400m to GBP800m. Another active advisor is Livingstone Guarantee, which acted for ...