HPS Investment Partners has agreed to invest into the UK wealth management division of Canaccord Genuity Group.
The private equity firm will acquire convertible preferred shares in the sum of £125m ($170m, €142m) issued by Canaccord Genuity Wealth Management UK (CGWM UK). The shares represent a 21.93% equity interest in CGWM UK.
The net cash proceeds from the sale of the convertible preferred shares will be used “for corporate purposes to optimise shareholder value”.
There will be no changes to the management or operations of CGWM UK, as the firm looks to “expand and grow the business through both internal development and acquisitions”, the company said.
HPS will be a strategic and financial partner to the business on future acquisitions and growth opportunities.
‘Strategic growth ambitions’
David Esfandi, chief executive of CGWM UK, said: “We are delighted to have found in HPS a long-term partner to further our strategic growth ambitions and consolidate CGWM UK’s position as one of the leading wealth management firms in the UK and crown dependencies.
“Recognising the strength and potential of our business, this significant investment enhances our ability to invest in our client offering and our people and accelerate the future growth of CGWM UK to benefit our clients’ evolving needs.”
Dan Daviau, president and chief executive of Canaccord Genuity Group, said: “Partnering with HPS provides us with an opportunity to build upon the exceptional growth that our UK wealth management business has achieved under David Esfandi’s leadership.
“The proceeds from this investment provide us with options and flexibility to redeploy capital towards strategies to advance our firmwide growth, enhance our long-term profitability, and provide optimal returns for our shareholders.”
The completion of the transaction will require the approval of the financial regulators in the UK, Jersey, Guernsey and the Isle of Man.