Old Mutual wealth division acquiring Quilter Cheviot
17 October 2014
British financial services giant Old Mutual Plc today said its wealth division was acquiring Quilter Cheviot, which is known for serving the affluent and high-net-worth segments of the UK private-client market, for up to £585 million, in a move to bolster its own discretionary investment management capabilities, Alliance News reported.
The company said in a statement, that the acquisition came under the wealth division's strategy of accelerating its development of a top retail investment business.
Old Mutual expects the deal to meet the group's return on equity target of 12 per cent to 15 per cent and generate annual group synergies of £15 million by 2017.
Old Mutual said, Quilter Cheviot had £16.2 billion of funds under management at the end of September, as also 38,000 clients. It added, Quilter Cheviot boasted operating margins of 29 per cent and revenue margins of 85-90 basis points.
According to chief executive Julian Roberts, Old Mutual had made "considerable progress" in executing its strategy this year.
"The acquisition of Quilter Cheviot delivers the final substantive part of our investment programme in the UK toward building a vertically integrated wealth management business of scale in the UK. Quilter Cheviot is a high quality franchise with excellent management, which delivers strong investment performance for its clients," Roberts said in a statement.
Meanwhile,Quilter Cheviot would become the discretionary investment management business within Old Mutual Wealth, citywire reported. Martin Baines chief executive of Quilter Cheviot, would continue in his role and would join the Old Mutual Wealth executive committee.
In August the web site had revealed that Quilter Cheviot's private equity owner Bridgepoint had been pushing to sell the business by the end of the year, either privately or through a public listing.
Sky News had reported last week that Old Mutual had tabled an offer for £650 million, although it withheld the details of the terms attached to that, and that Investec could also make a bid.
Chief executive of Old Mutual Julian Roberts said the company had made considerable progress in the execution of its stated strategy this year as it stepped up the pace of change in the organisation.
The purchase of the 243-year old wealth firm would complement Old Mutual Wealth's recent Network Intrinsic acquisition at the start of the year, which added 3,000 restricted and independent advisers to the group.