UK - Rothschild has sold its flagging UK retail, institutional and offshore (Guernsey) asset management businesses to Insight Investment Management, the fund management arm of HBOS.
The deal is worth £61m - including net assets of £20.8m - and will enable Rothschild to focus on its international private banking and wealth management activities. RAM manages around £11bn of retail (£1.6bn) and institutional (£9.4bn) funds of which some £1bn relates to Japanese and Singaporean business, which are not part of the transaction. The revenue split is institutional 51% and retail 49%. Rothschild's units in France and the US also remain unaffected.
The acquisition will increase Insight's funds under management to £68bn - total institutional funds now exceed £35bn.
Commenting on the sale, Baron Eric de Rothschild, chairman of RAM, said: This is a good deal for all parties concerned and we feel our client base will be well served. We firmly believe that Insight is the right partner to take these businesses forward.
But a leading consultant has expressed doubts about the viability of the acquisition and warned integrating RAM into its existing structures could harm Insight’s performance.
He said: “Insight has hired a lot of well known fund managers and has been buying firms, but its performance has not improved. We will have to visit them to determine whether or not integrating Rothschild will be a distraction to their current funds.”
Rothschild’s existing London-based private client business will now be combined with its private banking and trust operations in the UK, Switzerland, Guernsey, Bermuda and nine other key locations to create a single worldwide private banking business led by Mike Bussey, chief executive of private banking and wealth management.
Insight's chief executive, Douglas Ferrans, said: This acquisition is a fantastic fit. Insight has ambitious plans for the future and the acquisition of RAM significantly accelerates our organic growth strategy. This transaction enhances our proposition in two key areas: fixed income and fund of funds/multi-manager.
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