Scotland’s largest independent wealth manager Speirs & Jeffrey will change its name after its £104m acquisition by Rathbones.
Rathbones announced this morning it is buying Speirs & Jeffrey, which has funds under management of £6.7bn.
The initial consideration of £104m comprises £79m cash and £25m through the issue of new Rathbone shares. Rathbones is also lining up a £60m equity raise to help fund the deal.
The deal is subject to approval by the FCA and is expected to complete in the third quarter of 2018.
Rathbones group finance director Paul Stockton says Speirs & Jeffrey will drop its name and Rathbones will move its Glasgow office into the Speirs & Jeffrey building once the deal goes through, creating the company’s second-largest office.
Stockton says: “Growth will enable us to continue to invest in our business and effectively meet the ever-increasing demands of regulatory change.
“But it is not growth for growth’s sake – it is very important to pick a partner that is culturally aligned and has a similar mindset.”
While Rathbones says it will continue its acquisition programme to achieve growth, for now the company is focussing on its new and existing clients.
Stockton says: “Part of our strategy is to get inorganic growth but our focus in the short term we will be making sure the experience of Speirs & Jeffrey clients as well as our own is paramount.”
Commenting on the five-year strategy to reach £40bn of funds under management by the end of 2018, Stockton says the deal is “a big jump for us”.
In a first-quarter trading update released in May, Rathbones revealed that funds under management fell 3.3 per cent from £39.1bn to £37.8bn.
Stockton stressed this was related to the downturn in the markets at the beginning of the year and that Rathbones would bounce back.
He says: “Some that of that is very much reflecting how the market behaved. Funds under management are linked to markets and that is something we live every day. Our net organic growth was positive and we continue to grow.”
However, the deal broke down when Smith & Williamson decided to list on the stock exchange.
According to reports, the sale of Speirs & Jeffrey could net its 10 partners up to £20m each.