Canada’s Canaccord Genuity Group has agreed to buy Adam & Company’s private client investment management business for £54m ($74.4m) in cash consideration.
The seller is The Royal Bank of Scotland (RBS), part of the NatWest Group.
Canaccord Genuity carried out the deal through CGWM UK, its UK wealth management arm.
The deal, which is pending regulatory approval, enables CGWM to set foot in the Scottish market.
Adam & Company’s investment management business is an Edinburgh-based private client investment manager.
It has around £1.7bn in client assets, managed on a discretionary basis.
As part of the deal, CGWM UK will purchase the shares of Adam & Company Investment Management (AIM) and certain assets from RBS.
These assets include the Adam & Company brand, certain intellectual property as well as client contracts.
CGWM UK will absorb portfolio managers and supporting employees who are employed by RBS and dedicated to Adam & Company’s business.
A retention plan will be in place for key employees on the basis of client assets and continued employment over four years.
With both CGWM UK and Adam & Company running on the Avaloq platform, transition is expected to be seamless.
The acquired business will trade as Adam & Company upon deal completion, with its core client offering continuing to be largely same.
The current direct relationships between clients and portfolio managers will remain unchanged.
The acquired business’ professionals and clients will gain access to a host of resources through the deal.
These resources cover the areas of global and small cap equities, ESG and fixed income offerings, retirement, later life care and inheritance tax (IHT) planning capabilities.
The investment team of Adam & Company will be active members of CGWM UK’s investment committees.
Adam & Company managing director Graham Storrie will remain in a leadership role.
“To build on the success of Adam & Company’s investment management business it was essential to find a buyer who shared our investment philosophy and strategic ambitions for the future,” Storrie noted.
Upon AIM sale, banking and lending activities under the Adam & Company brand will be moved to the Coutts business of the NatWest Group.
The deal is expected to be finalised at the end of Canaccord Genuity’s second fiscal quarter.
CGWM UK also plans to launch a new office location in central Edinburgh for Adam & Company’s investment management business.
Canaccord Genuity expects the transaction to be accretive to its adjusted earnings.
CGWM UK CEO David Esfandi said: “Entering the Scottish market represents a very important milestone in our long-term growth strategy and we are pleased to be doing so with Adam & Company’s investment management business, a leading regional franchise with a strong cultural fit and a similar client base to our own.”
Earlier in 2019, Canaccord Genuity acquired UK-based Thomas Miller Wealth Management.