View more on these topics

&#39Benchmark set for future acquisitions&#39

The cut-price deal that Insight Investment has struck for Rothschild Asset Management is likely to set the benchmark for future acquisitions.

Insight paid only £61m for RAM, which includes £11bn of retail and institutional funds under management and £20m of net cash, valuing the company at just 0.55 per cent of its assets.

The deal is in stark contrast to the £1.9bn Prudential paid for M&G in 1999 – more than 10 per cent of its assets under management.

Despite Insight not acquiring the RAM brand, fund managers and IFAs believe the deal will mark a seismic shift in future negotiations.

One fund manager says: “There were exceptional circumstances – RAM has a lot of assets but was losing money – but it will still represent the benchmark from now on. The days when fund managers went for 10 per cent of assets are in the past.”

Fund managers say the focus for acquisitive companies is now on profitability rather than assets, which partly explains why Insight paid around half the reported asking price for RAM. But they believe cost-cutting measures will be difficult to implement with firms such as RAM which have expensive multimanager admin systems.

Another consequence of the Insight deal, according to IFAs, may be that struggling companies postpone putting themselves up for sale with so little chance of selling at a premium.

Chartwell Investment Management director Patrick Connolly says: “Now is not the time to be putting yourself on the market. No one will pay the asking price, even if they could afford to. Companies will now try to hold on for as long as they can before selling.”

RJ Temple marketing director Ian Millward says: “The investment industry is in a recession and there are now bargains to be had. Deals for £500m such as Jupiter had been looking for have long gone.”


DBS run-off deal excludes retired members

DBS is reinstating run-off cover but only for current members, leaving retired members vulnerable to claims.Run-off cover was withdrawn four months ago when the network renewed its PI policy through Misys&#39 regular broker Windsor, rather than the established DBS broker PYV.The rejig was put down to aligning the five Misys networks ahead of the merger […]

Gay couples will get equal pension rights

The Government is to introduce a civil partnership registration scheme that recognises gay relationships for the first time, leaving the financial services industry to ponder what impact it will have.The proposals, which the Government will consult on next summer, have cross-party political support.The move would permit gay couples to benefit from the same pension, inheritance […]

Half of advisers think buy-to-let saturated in South-east

Specialist lender Future Mortgages&#39 quarterly survey of 500 intermediaries reveals 51 per cent of respondents believe the buy-to-let market in London and the south east is precarious, 33 per cent think it is stable and 17 per cent say they are unsure about its future. And of those who took part in the survey 54 […]

Confusion over retrospective rules

The article, Pledge to end retrospective rules regime, seems to be diametrically opposed to the news that Mr Davies is extending the “statute of limitation” rules for endowment complainants.Perhaps he does not understand what retrospective rules regime actually means.Perhaps he is trying to appease Ms McKechnie at the Consumers&#39 Association – plenty of hits but […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm