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Brewin Dolphin buys Investec’s Irish wealth arm

Brewin Dolphin has sealed its deal to buy the wealth management business of Investec Group in the Republic of Ireland, as it looks to raise £60m more from shareholders in a bid to shore up its capital position and continue expanding after a host of recent acquisitions.

Last month, Brewin confirmed it was in “exclusive discussions” with Investec over the purchase.

It has now confirmed it has reached a binding sale agreement for the business arm, with total consideration expected to be around €44m (£38m).

The acquisition comes on the back of significant recent investment from Brewin in other deals. Brewin acquired Bath financial planners Epoch last month, as well as three other smaller businesses and launching its own private client planning business 1762 and low-cost advice service Wealth Pilot.

Together, Brewin says it has invested some £70m in these moves.

It is now planning to issue new shares to raise around £60m from investors.

The firm’s stock exchange announcement this morning notes: “Following these investments, the placing is being undertaken to maintain a strong regulatory capital level for the group, providing it with continued financial flexibility for further development opportunities.”

Even if the Investec deal does not go through, Brewin says it will continue with the placing and use the proceeds for “potential investment opportunities and general corporate purposes”.

Results this morning for the first half of 2019 show a slight improvement in funds under management from the first half of 2018, coming in at £42.4bn compared to £39.7bn.

However, adjusted pre-tax profits were down 8 per cent, at £35.6m.

Chief executive David Nicol says: “Our strategy of focusing on our advice-led wealth management service in the direct market continues to deliver results.

“We are investing in our business to support future long-term growth. Over the past few months we have announced the replacement of our core custody and settlement system and a number of acquisitions. These initiatives are laying the foundations for long-term growth and will ensure that we are well placed to capture market  opportunities.”

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