Brooks Macdonald Group announced that its subsidiary Brooks Macdonald International has signed into an agreement with Lloyds Bank International to acquire the Channel Islands wealth management and funds business for £9.6m.
The consideration includes £2.5m of regulatory capital. Brooks Macdonald aims to pay the full amount in cash from its financial resources. If the acquired business meets certain performance targets, the company will pay a contingent cash of up to £330,000 two years after the completion of the transaction.
Subject to regulatory approval, the deal could be completed in the fourth quarter of this year.
The deal includes 100% of Lloyds Investment Fund Managers’ (LIFML) share capital and the investment management assets and investment management client relationships of the discretionary investment management clients of Lloyds Bank International (LBIL), a subsidiary of Lloyds Bank Corporate Markets.
LBIL’s wealth management and offshore funds business has £1bn of funds under management (FUM), which includes an investment management business with nearly £500m in FUM serving 1,200 portfolio clients.
Brooks Macdonald CEO Caroline Connellan said: “Since his appointment as CEO of International last April, Andrew Shepherd and his team have led the reinvigoration of the business, delivering for clients, advisers and trustees.
“The acquisition of Lloyds’ offshore wealth and funds business adds to this transformation, bringing greater scale, new capabilities and expanded distribution reach. As well as the good strategic fit, our discussions with Lloyds Bank International have shown we have similar cultures with a shared strong focus on clients and intermediaries.
“This acquisition, the second for Brooks Macdonald in this financial year, is a further step forward in achieving our growth ambitions, complementing our organic strategy, creating value for shareholders and bringing benefits for clients and intermediaries.”
Brooks Macdonald to operate the acquired business under a new model
Following the deal’s closure, the combined business will be headquartered at Brooks Macdonald International’s office in Jersey.
Several LBIL staff members will be offered roles in the combined business to expand its capability and to continue customer service.
Brooks Macdonald aims to operate the acquired business under a new model that is different from that currently employed by Lloyds.
The company will outsource fund administration and will use its existing investment management strengths to bring that activity in-house.
