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June 25, 2020

Brooks Macdonald to purchase Lloyds Channel Islands wealth unit

British wealth manager Brooks Macdonald Group has agreed to buy the Channel Islands wealth management and funds business of Lloyds Bank International for a maximum consideration of £9.63m ($11.97m), including £2.5m of regulatory capital.

Brooks Macdonald will carry out the transaction through its unit Brooks Macdonald Asset Management (International).

Under the agreement, Brooks Macdonald will acquire Lloyds Investment Fund Managers along with the clients and investment management assets of Lloyds Bank International, a subsidiary of Lloyds Bank Corporate Markets (LBCM).

It will pay the deal consideration in cash using its existing financial reserves.

The consideration includes an initial payment of up to £9.3m and a contingent payment of up to £330,000 after two years from deal closing based on the performance of the purchased entity.

Commenting on the deal, Brooks Macdonald International CEO Andrew Shepherd said: “It increases International FUM materially, brings a high quality discretionary portfolio client base and adds a strong multi-asset and fixed income fund range to our proposition to clients, advisers and trustees.

“It also brings additional intermediary relationships, increasing our distribution reach.”

The deal will bring £1bn in discretionary FuM to the acquirer.

It is expected to boost Brooks Macdonald international’s FuM to £2.5bn and add up to 1,200 private clients.

The group’s FuM is expected to grow by up to 8% to over £13bn following completion of the deal, which awaits regulatory nod.

It will also add multi-asset and fixed income fund capabilities to the acquirer.

The acquired entity will be renamed as Brooks Macdonald International upon deal completion in the final quarter of this year. The merged group will be based in Jersey.

As part of the deal, many Lloyds staff will join the merged group.

At the same time, Brooks Macdonald entered a reciprocal arrangement with LBCM that will enable the two businesses to introduce relevant services to each other’s customers.

Last November, Brooks Macdonald announced the acquisition of Cornelian Asset Managers Group, an Edinburgh-based wealth manager with nearly £1.4bn in FuM.

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