UK wealth manager Towry – which built up £9 billion (€11 billion) of client assets using a fee-based adviser service even before regulatory bans on commissions forced other advisers into the same model – is to be sold by its private equity backers.
Palamon Capital Partners, Towry’s private equity owners, is selling Towry to Tilney Bestinvest for £600 million subject to regulatory approval.
Towry itself, with Palamon’s backing, has made six acquisitions in recent years following the UK’s retail distribution review (RDR). Palamon had recognised RDR would provide a consolidation opportunity, the firm said.
The RDR, implemented in 2013, saw the ending of commissions paid to advisers, which were replaced by fees. Palamon said Towry had operated this fee-for-service model successfully “for years” before the RDR.
One of Towry’s most recent acquisitions was the listed Ashcourt Rowan wealth management business in 2015, which Towry took private.
Towry has revenues to £120 million.
The sale will result in total sterling investment returns for Palamon of 13 times invested capital.
Towry is one of the largest independent wealth managers in the UK more than 900 staff across 21 regional offices and offers investment management alongside financial planning.
Palamon said the combination of Towry and Tilney Bestinvest would create the leading UK wealth management firm for affluent and high net worth clients.
Palamon has a history of wealth management acquisitions, starting with John Scott & Partners in 2003.
Rob Devey, chief executive of Towry, said that over the past two years Towry had more than doubled earnings and driven strong improvements in client satisfaction.
Bestinvest’s ‘Best of Breed’ fund range was rated as the “star performer” among UK ‘gatekeepers’ recently by Fundscape and GBi2.
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