Private wealth management firm Quilter & Co – which has a major operation in Birmingham – has agreed a deal to merge with a rival.
The company, which has its second-largest office on Bennetts Hill, will combine with Cheviot Asset Management to create a firm with £12 billion worth of assets under management.
The undisclosed transaction was funded by Quilter’s European private equity firm owner Bridgepoint, which is backing ambitious expansion plans at what will now be known as Quilter Cheviot.
The merger, which is subject to regulatory approval but is likely to complete at the end of the year, will create the second-largest wealth management firm in the UK, with hundreds of staff, 4,000 clients, ranking behind only Brewin Dolphin by size.
The new firm will be headed up by Quilter’s current chief executive Martin Baines – who previously headed up the Birmingham office.
Mr Baines said: “We have made no secret of our intention to join forces with complementary businesses to accelerate our growth and there is a really strong fit between the two firms.
“The many synergies will benefit all of our clients and, as a combined business managing over £12 billion of assets, we will have the scale and resources to be an even more powerful contender in the private client wealth management sector.”
Reports in the national media claim while the price that Bridgepoint is paying for Cheviot is unclear, it is understood to be less than £100 million.
More mergers are expected in the private wealth management sector amid changes from the enforced disposal of assets by major banking groups.
Between them, Cheviot and Quilter manage funds for some of the wealthiest individuals in Britain, as well as charities and trusts, pension funds, corporate bodies and friendly societies.
The average client of the two firms is understood to have up to £500,000 in assets for investment.
Quilter – which has 385 staff based in 13 locations in the UK, Jersey and Ireland – currently manages £8.2 billion worth of assets, while Cheviot has £4.1 billion and employs 139 partners and other staff in offices in London and Liverpool.
Cheviot chief executive Michael Kerr-Dineen, the former chief executive of UBS Laing & Cruickshank who founded the firm in 2006, will join the holdings board of Quilter Cheviot and act as a senior adviser to the firm.
He said: “This transaction is recognition of all we have achieved and provides us with far greater scale and geographic reach and will enable us to enhance our client services and capabilities still further.
“Quilter shares many of our values and aspirations and we are all looking forward to working with our new colleagues. The creation of Quilter Cheviot will provide wealth management clients with a tremendous source of advice, experience and security in today’s uncertain financial markets.”
Bridgepoint acquired Quilter’s UK business from Wall Street bank Morgan Stanley in a deal valuing it at about £180 million.
It was the second time that Morgan Stanley had sold the business, having previously off-loaded it to Citigroup in 2006.
Stephen Green, the partner responsible for Bridgepoint’s UK investment activities, said: “Scale as well as investment excellence are increasingly important in building businesses like Quilter. This acquisition brings together some of the best people in the fund management industry and goes some way to reinforcing Quilter Cheviot’s position as one of the UK’s leading private client investment management firms.”
Linklaters and PwC advised Quilter & Co while Addleshaws and Deloitte acted for Cheviot.