Old Mutual Wealth has agreed to acquire discretionary fund manager (DFM) Quilter Cheviot in a deal worth £585m from private equity firm Bridgepoint.
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Old Mutual Wealth believes that the acquisition will add a strong discretionary investment management capability, accelerating its strategy to build a vertically integrated wealth management business with £92bn of funds under management.
The acquisition is expected to generate annual cost savings of £15m by 2017.
As part of the acquisition, Quilter Cheviot CEO Martin Baines will join the Old Mutual Wealth executive committee and will report to Old Mutual Wealth CEO Paul Feeney.
Under the terms of the deal, a significant proportion of the consideration will be used to discharge outstanding third party debt and other non-operating liabilities of Quilter Cheviot.
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By GlobalDataThe acquisition will also expand Old Mutual Wealth’s retail client base in attractive affluent and HNW segments of the UK wealth management market and will also allow the firm to broaden its distribution capabilities and increase the proportion of clients’ asset management services.
Julian Roberts, Group CEO of Old Mutual, said: "The acquisition of Quilter Cheviot delivers the final substantive part of our investment programme in the UK toward building a vertically integrated wealth management business of scale in the UK. The acquisition is funded from part of the proceeds of the recent disposals in Europe and the US IPO."
Quilter Cheviot now has £16bn of funds under management, 38,000 clients and 165 investment managers.
Subject to regulatory approval, the transaction is expected to complete in the first quarter of 2015.
