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European Wealth buys £17m-strong asset manager

European Wealth buys £17m-strong asset manager

European Wealth has purchased asset manager Cimco Partners Management for £750,000, in the latest move to expand the wealth management firm.

Gibralter-based Cimco, which currently has $22m (£16.5m) of assets under management, runs two funds, the G20 Absolute Return fund and the G20 Property fund.

A third fund, run by Cimco fund managers, will be added to European Wealth’s in-house range, and is expected to offer an investment style which is not currently offered within the group’s portfolio.

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The fresh fund will broaden the range of equity investment styles available ahead of the launch of an institutional equity service, which is planned for later this year.

Lead investment director of Cimco, Michael Mechas, will also be joining European Wealth following the acquisition and will continue to manage the absolute return fund.

He will join European Wealth’s investment committee and work with the executive team to identify opportunities for buying international businesses.

This news comes despite European Wealth continually failing to make pre-tax profits, but its group chief executive John Morton was confident there would be an improvement by the end of this year.

Last month, the firm announced it was planning to revise its charging structure to better align the pricing with a level of service that is “appropriate” for clients.

Mr Morton said he expects the acquisition to strengthen European Wealth’s position as a “broad based” and established wealth manager.

He added: “I look forward to Michael joining the investment team and supporting the growth of the company.”

European Wealth will pay an initial consideration of £500,000 for Cimco, and will then issue 909,091 shares at a price of 55p.

A deferred consideration of up to £250,000 will be payable about 12 months after the acquisition is complete through the issue of further shares.

katherine.denham@ft.com