Brewin Dolphin to buy Investec's Irish wealth management business

10th May 2019 07:57

(Sharecast News) - Wealth manager Brewin Dolphin confirmed on Friday that it has agreed to buy the Irish wealth management business of Investec for around €44m, as it announced a placing to raise approximately £60m to "maintain a strong regulatory capital level".The company, which had flagged back in April that it was in talks with Investec, said the acquisition of a growing business in one of Europe's fastest growing economies, with attractive demographics is consistent with its strategy of growth in assets under management.In addition, it builds on Brewin's existing business in the Republic of Ireland, to create a top 3 wealth management business there with assets under management and advice in excess of €4.6bn.Chief executive David Nicol said: "This acquisition, which is consistent with our strategy of growth in assets under management, provides us with an exciting opportunity to strengthen substantially our existing presence in the Republic of Ireland, one of Europe's fastest growing economies."We will also be in a stronger position to benefit from the country's growing demand for discretionary and advice-led services, supported by favourable demographics, with the country having the youngest population in Europe."Our businesses are highly compatible in terms of culture, values, investment philosophy and client centric approach, which combined with our established platform, will enable us to meet more effectively the growing demand for wealth management services in both the UK and the Republic of Ireland."Brewin also said it was placing around £60m of new ordinary shares in the capital of the company at 305p per share, to maintain a strong regulatory capital level and provide "continued financial flexibility for further development opportunities".Alongside news of the acquisition and placing, the group also released its first-half results, which showed that total funds rose to £42.4bn from £39.7bn in the first half of 2018.Meanwhile, total income for the period increased marginally to £162.3m from £161.8m, due to largely flat average funds over the period. Profit before tax and adjusted items was down 8.2% from H1 2018 to £35.6m.Nicol said: "In the first half of 2019, the group has continued to deliver strong and resilient organic growth, even with the backdrop of volatile market conditions. This is demonstrated by the strength of our discretionary funds flows. Our strategy of focusing on our advice-led wealth management service in the direct market continues to deliver results."We are investing in our business to support future long-term growth. Over the past few months we have announced the replacement of our core custody and settlement system and a number of acquisitions. These initiatives are laying the foundations for long-term growth and will ensure that we are well placed to capture market opportunities."At 0810 BST, the shares were down 3.2% at 310.82p.