Big moves incoming in the sector

Long rumoured but now may be the time for mass consolidation. There are certainly moves happening now that are set to shake the wealth management sector.

First, UK-based wealth manager Tilney wrapped up the takeover of its rival Smith & Williamson, creating a business with AuM of more than £47bn ($59.9bn).

The combined business will operate under the name Tilney Smith & Williamson.

Tilney Smith & Williamson group CEO Chris Woodhouse said that the two companies are “highly complementary to one another”.

Woodhouse stated: “Together they bring an incredible pool of talented professionals with a strong ethos of delivering exceptional service to their clients. This is a great foundation for the future.”

In terms of revenues, the merged group is said to be the third-largest wealth manager in the UK.

It is said to be the UK’s fourth largest wealth management firm by AuM.

The combined business, with pro forma revenue of £530m, will have offices across the UK, Republic of Ireland and The Channel Islands.

It will have 290 investment managers, 265 financial planners and over 140 professional services partners and directors.

The deal was announced in September 2019 for £625m.

However, it was deferred owing to the Covid-19 pandemic and ongoing talks with the regulatory body FCA about its revised structure.

In June this year, the two companies agreed on a revised deal structure for their merger.

Furthermore, private equity firm Warburg Pincus agreed to co-invest in the consolidated business along with funds from Permira.

Last month, Smith & Williamson shareholders approved the deal.

Another behemoth has entered the UK market and the Swiss could see an even bigger deal.

Covered in this issue, UBS and Credit Suisse are rumoured to be merging. The two biggest banks in the country combining is a move that will rock markets outside the country. It could create a new giant in wealth management.

So why are big deals coming out of the woodwork?

In the middle of a global pandemic, many firms are wondering about their stability. Naturally, some are looking for reinforcements.

While the Tilney deal has been on the cards for months, the Swiss merger came as a surprise. What shouldn’t come as a surprise is more of these deals before the year is done.

At the start of 2021, we should see a whole new landscape of names.

Patrick Brusnahan

Editor, Private Banker International