UK’s Brooks Macdonald buys Arch cru fund manager Spearpoint

UK based Brooks Macdonald has acquired discretionary fund manager Spearpoint, manager of the Arch cru funds, in a deal that could reach £32m.

Expected to complete on 19 November, the deal will see Brooks pay an initial £23.1m for the Jersey and Guernsey based group, with a deferred consideration of up to £9m, based on the future level of Spearpoint’s discretionary FUM, payable in November 2014.

Spearpoint took over management of the Arch cru range in late 2009, with a mandate to oversee an orderly wind-up of the funds.

Brooks will raise £21.5m via a placing of 1,869,566 million ordinary shares at a price of £11.50 per share to fund the acquisition. It said the placing has received “strong support” from existing and new institutional shareholders.

“The acquisition of Spearpoint is a major step forward for the group and captures an opportunity we have been seeking for a number of years.  It adds scale, offshore and international capability together with the acquisition of a strong investment management and pensions team,” said Brooks CEO Chris Macdonald (pictured).

“We are confident that the combined group will be a leading presence in UK wealth management and that the acquisition will be immediately earnings enhancing.” 

Spearpoint’s £1.1bn AUM constitutes £614m worth of discretionary private client money, £95m in discretionary funds, and £370m from advisory private clients – as well as 545 execution-only clients, according to broker Numis, which said the deal “appears to be attractively priced and structured”.

 

This article was first published on Investment Week


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