Schroders has agreed a £424m deal to acquire Cazenove Capital.
The deal will significantly increase Schroders’ assets in both the private banking and UK intermediary space and brings it total assets under management to £229.2bn.
The acquisition will cost Schroders £395m with the asset manager setting aside a further £29m for the future cost of existing deferred share compensation arrangements for Cazenove Capital employees.
Schroders has confirmed it intends to continue using the Cazenove brand within its private banking unit.
Cazenove has confirmed that all of its fund managers will join Schroders. Cazenove currently has £5.1bn of assets within its investment funds business.
Schroders says the acquisition will provide economies of scale, principally in UK funds distribution and infrastructure, which the asset manager expects will enable it to achieve pre-tax cost synergies of between £12 million and £15 million per annum.
Schroder chief executive Michael Dobson says: “This transaction creates a leading, independent private banking and wealth management business in the UK, and brings additional investment talent in complementary strategies across UK and European equities, multi-manager and fixed income to asset Management. I am confident the transaction will create long-term value and benefits for clients, shareholders and employees.”
Cazenove Capital chief executive Andrew Ross says: “This is a very exciting development for Cazenove Capital. In combining with Schroeder, we will create a pre-eminent independent private banking and charities business in the UK, with a broader capability covering investment management, financial planning, deposit-taking and lending services. This is also an excellent fit for our wealth management businesses in the Channel Islands and Asia.”