Deal Maker of the Year Awards 2012 WINNER - UK
DEAL: Canaccord Financial is to acquire the wealth management business of Eden Financial to expand Collins Stewart Wealth Management
NAME: Neil Darke COMPANY: Collins Stewart Wealth Management POSITION: Chief Executive TEL: +44 (0)20 7523 8494 EMAIL:
ndarke@collinsstewart.com WEBSITE:
www.collinsstewartwealth.com
DEAL OVERVIEW: Q
Please summarise the transaction
Collins Stewart Wealth Management, via its parent company, Canaccord Financial Inc. (“CFI”) acquired the wealth management business of Eden Financial Limited (“Eden”), a boutique UK private client investment management business, to expand its UK wealth management platform.
Based in London, Eden is an independent, owner-managed private client investment management business with over £800 million in assets under management on behalf of 2,500 clients. With a personal approach to wealth management and a highly experienced team, Eden has established itself as a well-respected name in UK private client investment management.
CFI provided consideration of up to £12.8 million in cash, of which £7.68 million was payable upon completion and up to £5.12 million after 12 months, subject to revenue retention and revenue mix thresholds. Further incentives of up to £4.0 million have also been set to reward further revenue growth and revenue mix targets.
Q
What was your role within the transaction?
As CEO of Collins Stewart Wealth Management, I am responsible for the overall strategy of Canaccord’s UK & European wealth management business. Our publicly stated growth ambitions revolved around a three-pronged approach: organic, the recruitment of investment professionals, and acquisition(s). Having made two acquisitions in 2010 we were keen to continue adding to our platform. My role was both to identify opportunities, assess their fit within our existing business and take a lead on the negotiations.
Q
What were the challenges or difficulties presented?
As with any acquisition within the private client wealth management universe, ensuring there is a cultural fit is crucial as it is a people business. To determine this takes time, plenty of due diligence and a lot of face-to-face contact with our potential partners. The additional challenge we faced in this deal was our change of ownership in the middle of the transaction. CFI acquired our previous parent, Collins Stewart Hawkpoint plc, in March 2012, many months after we had been negotiating the deal. Thanks to our strength of the relationship we had built, we were able to introduce Eden to our new parents and resume the discussions that eventually lead to the conclusion of the transaction.
Q
What are your plans following the transaction?
Integrating Eden Financial into our existing UK private client business will be our priority for the next six months. We moved the Eden staff into our offices within two weeks of completion and we will transfer Eden’s clients to our in-house custody platform shortly. The benefit of Eden’s new ownership to its clients will be evidenced by a significant increase in the service standards they receive. In addition we will work on converging the separate investment processes to ensure all parties benefit from the wider breadth of investment resources available from the enlarged team.
Q
What are your thoughts and predictions within your sector for 2013 and beyond?
There has been an increase in sector M&A in recent weeks – Collins Stewart Wealth Management/ Eden Financial, Rathbones/
Taylor Young, Quilter/ Cheviot and Brooks Macdonald/ Spearpoint . We are aware of fur- ther deals in the offing and we expect to see more deals announced in the coming weeks.
Despite this, the UK wealth management industry remains very fragmented and we would continue to expect further consolidation in 2013 and beyond, driven by increased regulatory costs, a changing regulatory environment (e.g. RDR) and difficult market conditions.
BIO:
Neil Darke, Chief Executive, Collins Stewart Wealth Management.
Neil is responsible for Collins Stewart Wealth Management (“CSWM”) and chairs CSWM's Executive Committee. He also sits on the Canaccord Genuity (CSWM’s parent company) Executive Committee. Having joined the firm in 1993, his tenure is over 18 years, originally joining as an analyst before developing and running Quest™, the proprietary stock research tool, from 1996- 2005. Neil then ran the firm’s Securities division between 2005 and 2007 before taking responsibility for CSWM in 2007. Previously he was an analyst/ fund manager at Royal Insurance Asset Management. Neil graduated from the University of Bath with a BSC Hons (1st class) in Mathematics. Neil is married to Laura and they have 4 children, despite which he still plays competitive rugby.
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