- Deal sees veteran Pease bow out
- Consolidation gathering pace
- Listed UK firms could be vulnerable to takeovers
Competition for customers and the need for economies of scale are driving another round of consolidation in the UK wealth management industry with the announcement this week of yet another deal.
Yesterday it emerged that hedge fund Lansdowne Partners had agreed to acquire equities specialist Crux Asset management for an undisclosed sum.
‘NO BETTER HOME’
Lansdowne, which started life in 1998, was highly regarded as a global long/short investor but due to a series of poor bets its assets have dwindled from over $20 billion five years ago to around $7 billion today.
Crux on the other hand is a UK and European equities manager with around £1.7 billion in funds at the end of last year, mainly for UK wealth management clients, according to press reports.
The firm was founded in 2014 by former New Star and Henderson fund manager Richard Pease, who is retiring following the deal and passing management of his two funds to Lansdowne’s Daniel Avigad.
Pease said there was ‘no better home’ than Lansdowne for Crux’s staff and clients, while for Lansdowne the deal expands its UCITS capability (which allows it to sell funds into Europe).
TREND TOWARDS CONSOLIDATION
This week’s deal follows last month’s £96 million acquisition of Swiss asset manager GAM by Liontrust (LIO), creating a wealth business with more than £50 billion under management, and Rathbones’ (RAT) merger with the UK wealth management arm of Anglo-African firm Investec (INVP).
It also coincides with Franklin Resources’ (BEN:NYSE) announcement this week it was buying rival Putnam Investments from Canadian insurer Great-West Lifeco (GWO:TSE) for more than $1 billion, adding another $136 billion in assets.
Templeton’s chief executive Jenny Jones has taken the firm from being a traditional value-driven stock picker to a multi-asset manager, and the deal with Putnam will add valuable skills in alternative products.
Over the last five years, quoted UK asset management firms have generally performed poorly with just two stocks posting share price gains and the rest posting fairly hefty losses which could leave them vulnerable to an approach.
