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UK private client investment management business sold for £28m

Brown Shipley

Brewin Dolphin has acquired the UK private client investment management business of Duncan Lawrie via the acquisition of Duncan Lawrie Asset Management Limited (DLAM) for £28m.

DLAM is the investment management subsidiary of Duncan Lawrie Private Banking, the private banking arm of Camellia Plc.

DLAM has funds under management of over £700m spread across around 1,000 clients. Some 84% of the funds are managed on a discretionary basis.

The deal, which is subject to regulatory approval, is based on a cash payment on completion of £25.5m and a payment to reflect the value of net assets in the business at that date, estimated at £2.5m. It is financed by the Brewin Dolphin’s own cash resources, which stood at £171m at the end of the Company’s financial year (30 September 2016).

Subject to the deal completing during the first half of 2017, Brewin Dolphin expect their funds under management to increase to just over £36bn.

Chief Executive of Brewin Dolphin David Nicol said: “DLAM is a high quality investment management business and the acquisition is an excellent fit for us given the shared business philosophy centred on a personalised approach to client service. The transaction demonstrates the attraction of Brewin Dolphin to wealth management professionals and clients who value traditional, personalised services coupled with an innovative, forward looking approach.”

The DLAM team will continue to be led by Head of Wealth Management Seth Cowburn and the firm’s investment team of 11 investment managers and eight investment support staff are expected to remain.

In a statement issued today, Brewin Dolphin management said: “Based on the performance in the nine months to September 2016, the annualised revenues of the Business are expected to be approximately £6.2m, with annualised employment costs relating to the 19 employees who are expected to join the Group of approximately £1.4m. The annualised direct pre-tax profit related to the Business is therefore expected to be approximately £4.8m.  It is estimated that Brewin Dolphin’s incremental and ongoing administrative, overhead and variable staff costs, as a result of acquiring the Business, will be up to £1.1m per annum.  Brewin Dolphin’s non-recurring project and transaction costs for the acquisition are expected to be approximately £2.0m. The Transaction is expected to be enhancing to adjusted earnings per share from the financial year ending September 2017 onwards.”

Cowburn said: “The investment management team at Duncan Lawrie Asset Management is excited to be joining Brewin Dolphin particularly given that its culture and investment style represent a natural home for DLAM. This was important in our decision making, and with the entire investment management team being welcomed by Brewin Dolphin, both continuity of service and the staff will remain unchanged.  Brewin Dolphin’s financial planning, research, infrastructure and investment management expertise will considerably enhance the service we can offer, and we see the sale to Brewin Dolphin as a very positive development for both the clients and the investment management team.”

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