Brewin Dolphin has confirmed it is in exclusive talks with Investec regarding the purchase of its Irish wealth management business as sales slow in the UK.
The FTSE 250 wealth manager released a regulatory filing in response to a Sunday Times article detailing the potential acquisition. It said discussions are ongoing and there can be no certainty whether a transaction will be agreed.
The price being touted for the acquisition is rumoured to be €60m (£51.8m, $67.8m).
Rathbones and the Bank of Ireland are also reported to have been interested parties in a potential sale. Rathbones declined to comment when approached by our sister publication Portfolio Adviser.
Diversify and they will come
Ryan Hughes, head of active portfolios at AJ Bell, said: “This appears to be a continuation of the trend towards consolidation in the asset management and wealth management sectors as firms look to compete in a tougher regulatory environment and tackle the continued challenge of the growth of passive management.”
He added: “Brewin have existing business in Ireland and this looks to be an opportunity to build on that base with this potential acquisition and diversify the business further into Ireland at a time when its chief executive has said that client activity is slowing in the UK.”
In a quarterly trading update published in January, Brewin Dolphin chief executive David Nicol attributed a slowdown in intermediary client activity as investors assessed the market environment.
Adrian Lowcock, head of personal investing at Willis Owen, said the Irish business was not core for Investec. “Given markets are trading well on the back of 10-year bull run Investec might see this as a good exit point.”
He disputed that Brexit could be a driving factor behind either Investec or Brewin Dolphin’s decisions. “Brewin could be seeking an Irish part as wealth managers can be quite country specific as most clients have a strong country bias.”
Brewin Dolphin said a further announcement will be made if, and when, appropriate.
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