Kleinwort acquires Close Brothers’ offshore arm

Close Brothers has sold its trust, fund administration, asset management and banking business in the Channel Islands and the Isle of Man to Kleinwort Benson Channel Islands Holdings for £29.1m.

Close Brothers’ Channel Islands and Isle of Man business recorded an after-tax pro-fit of £0.7m in the year to July 31, with £622m in gross assets, £474m of funds under management and £566m in customer deposits.

The price is subject to adjustment depending on the businesses’ net assets at the time of completion, expected by the end of the year, pending regulatory approval.

Close Brothers expects the sale to generate a loss on disposal of £24.7m, including the cost of the sale and an £11.2m impairment of goodwill.

Close Brothers chief executive Preben Prebensen says: “We are committed to developing our UK-based wealth and asset management business and divesting of these offshore activities is a further step in this transformation.”

AES International chief executive Sam Instone says: “Close Brothers’ international reputation and unfettered funds make it attractive to IFAs. The expertise and economies of scale from Kleinwort will improve that, helping increase market share.”

Last year, Belgian-listed RHJ International bought Kleinwort Benson Group and Dublin-based KBC Asset Management, which was rebranded Kleinwort Benson Investors.
It is part of a strategy to move RHJ International from industrial holdings towards financial services.

Kleinwort Benson currently operates in the UK, Jersey and Guernsey and the deal will expand its operation to include the Isle of Man and increase its assets under management from £5.2bn to just under £7bn.

The firm has 350 employees in the Channel Islands, Isle of Man and South Africa, where back-office administrative support is carried out.

Kleinwort Benson chief executive Sally Tennant says: “There will naturally be a period of integration involving restructuring of elements of the business models to ensure efficiency.”