Brooks Macdonald is set to take over Lloyds Bank International’s offshore wealth management and funds businesses for the best part of £10m, while entering a referral agreement with Lloyds.
In a stock exchange announcement this morning (June 24), the asset and discretionary fund manager reported it had entered into a binding agreement to acquire 100 per cent of the shares in the Channel Islands firms for up to £9.63m.
The takeover will see Lloyds Investment Fund Managers and the clients and assets of Lloyds Bank International — both subsidiaries of Lloyds Holdings Jersey and whose ultimate parent company is Lloyds Banking Group — move over to Brooks.
Some £1bn discretionary funds under management will be added to Brooks, half from the investment management business serving 1,200 clients and another £500m from the funds business, distributed through about 50 advisers serving 10,500 clients.
Through the discussions, Brooks and Lloyds Bank Corporate Markets also reached a referral agreement whereby the two firms will introduce relevant services to each other’s clients.
The stock exchange announcement said the acquisition had a “compelling strategic rationale” for Brooks in line with its strategy to consider “selective high quality inorganic opportunities”.
Brooks added the move further transformed the Brooks Macdonald International business, increased its international assets by two-thirds to £2.5bn and added multi-asset and fixed income fund capability.
Caroline Connellan, chief executive of Brooks Macdonald, said: “As well as the good strategic fit, our discussions with Lloyds Bank International have shown we have similar cultures with a shared strong focus on clients and intermediaries.
“This acquisition, the second for Brooks Macdonald in this financial year, is a further step forward in achieving our growth ambitions, complementing our organic strategy, creating value for shareholders and bringing benefits for clients and intermediaries."
Brooks will initially pay £9.3m for the business in cash from its existing resources. The further £330,000 will be contingent on pre-agreed performance targets.
The acquisition is expected to complete in Q4 of this year following regulatory approval.
Alasdair Gardner, islands director of Lloyds Bank International, said it was of “paramount importance” to the firm that it found a company with a similar culture to its own, with a “strong client focus” at its heart.
He added: “We wanted to be confident that our clients and intermediary supporters would continue to receive the highest levels of service and an owner that they would be happy to work with in the future.
“Throughout our discussions, we have been impressed by the strong client focus and growth aspirations of the Brooks Macdonald International management team and we are very pleased to have reached this agreement with them.”
The takeover is Brooks’ second acquisition, having bought Edinburgh-based Cornelian Asset Managers in November last year.
Chief executive Ms Connellan later told FTAdviser the firm was on the lookout for more acquisitions in 2020 but had a "very high bar" for target firms.
imogen.tew@ft.com
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