Private equity group
Bridgepoint, which this month bought Morgan Stanley Smith Barney’s
(MSSB) UK retail wealth management business Quilter, has hinted at
further acquisitions for its newest addition.
MSSB agreed to divest
Quilter, which has about £7.6bn ($11.8bn) of client assets under
management (AuM), after deciding the subsidiary was not core to its
central strategy, involving the ultra high net worth client
segments. Quilter specialises in private clients with £200,000 to
£3m to invest.
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“Quilter is operating in a
large but fragmented market favoured by underlying structural
growth drivers,” Bridgepoint partner Michael Black said.
“As such, we believe that
there is every opportunity for Quilter to accelerate its growth
organically, as well as make complementary acquisitions for the
business.”
Bridgepoint has already had
success in repackaging corporate assets for resale in the wealth
sector after selling Tilney, a regional brokerage in the UK, to
Deutsche Bank in 2006 for an estimated £350m.
There is no official word on
the price Quilter fetched in the Bridgepoint deal, which beat off
interest from another private equity house Permira, although
knowledgeable sources put it at about £175m. This equated to about
2.5% of AuM – about par for the course for wealth management
M&A deals.
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By GlobalDataQuilter managing director
Stephen Vakil told PBI that the firm’s new independence
will help to provide it with “an extra growth spurt” as one of the
premier private client players.
This will centre on the
recruitment of more good quality investment managers as well as the
possibility of bolt-on acquisitions under the parentage of
Bridgepoint.
Quilter favoured the
“old-fashioned investment manager” who preferred direct contact
with clients, rather then being hidden behind relationship
managers, Vakil added.
Quilter has had multiple
owners in recent years. It was originally sold to Citigroup in
2006, but it came back into Morgan Stanley’s fold after the two
American banks agreed to pool much of their wealth management
activities, which included Quilter, under the MSSB brand three
years ago.
Quilter has also been owned
by Commercial Union, now Aviva, and France’s Banque Paribas over
the years.
The firm employs about 350 staff based in 13 locations
throughout the UK, Jersey and Ireland.
