This is the second time Morgan Stanley has sold Quilter. Previously, the bank sold the unit to Citigroup in 2006, but reacquired the business in 2009 when the two banks combined their wealth management operations in the joint venture Morgan Stanley Smith Barney.
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Quilter has GBP7.6 billion of funds under management as of December 31, 2011 and focuses on affluent but not ultra-rich clients, trusts, charities and pension funds. The business employs approximately 350 staff via a regional network of 13 offices throughout the UK, Jersey and Ireland.
Quilter CEO Martin Baines said: "Under Bridgepoint ownership, Quilter will not only continue to do what it has always done best, provide highly personal investment management services to advisers and individuals, but also grow and extend what it can offer its clients."
Typically, US banking groups operate private banks in Europe that concentrate on the super rich and run wealth management brokerage businesses in their home market to serve the so-called mass affluent segment.
Morgan Stanley is too gradually moving in this direction and the move signals the bank’s dwindling interest and gradual withdrawal from Europe’s mass affluent market.
WealthInsight believes that Morgan Stanley will now shift its focus towards Europe’s high net worth and ultra- high net worth market.
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By GlobalDataA further focus on ultra-high net worth clients may help Morgan Stanley Smith Barney improve its so-far disappointing financial showing. The unit’s 2011 earnings fell short of expectations when the partnership was cut, while little of $1.1 billion in cost savings have been achieved and pre-tax margins of 10% were half of initial projections.
The deal also underlines private equity groups’ renewed interest in financial services, where they are preparing themselves for a wave of disposals from European banks forced to shrink their balance sheets.
