Permira agrees to buy Tilney, creating $15 bln UK wealth manager

The new company will be created by merging Tilney’s regional businesses with Bestinvest, an investment adviser firm acquired by Permira last year with 5.1 billion pounds of assets under management, to help broaden the reach of both firms.

“This will propel the combined group right up to the top of the table in the UK market,” said Jason Hollands, Managing Director at Bestinvest.

Tilney provides investment services to wealthy individuals and controls 3.5 billion pounds of assets. It is currently owned by Deutsche Asset and Wealth Management (A&W).

Permira, which is awaiting regulatory approval for its acquisition of Bestinvest from 3i in November 2013, is hoping to create large managers from what it called a “fragmented” industry populated by smaller firms.

“They were very clear (when they took over) that they saw consolidation opportunities in the industry,” said Hollands.

The interest of bigger players in the UK fund industry also arose on Wednesday when US hedge fund Elliott Management acquired derivatives equivalent to a stake of almost 11 percent in Britain’s F&C Asset Management. 

The deal will see Bestinvest take over Tilney’s regional offices in Birmingham, Edinburgh, Glasgow and Liverpool, expanding its footprint in the areas, while allowing Tilney to capitalize on Bestinvest assets such as its online platform.

Deutsche A&W will retain Tilney’s London office. The merger is subject to regulatory approval and is expected to be completed in the second quarter of 2014.

Private assets under management in Britain totaled almost 50 billion pounds in 2013, data from Private Asset Managers Online showed.

Permira was advised by Freshfields Bruckhaus Deringer and Fenchurch Advisory. Deutsche A&W was advised by its in-house M&A team and Clifford Chance.

Freya Berry is a reporter for Reuters News in London