Wealth manager Towry has been sold to rival Tilney Bestinvest in a £600 million deal in the latest consolidation move in the financial advice sector.
Tilney Bestinvest said the combination of the two firms would create one of the leading UK wealth management firms, with responsibility for over £20 billion of assets for affluent and high net worth clients.
The sale of Towry, one of the largest independent wealth managers in the UK, will see owners Palamon Capital Partners reap a return of 13 times its investment.
Both advice firms have a significant presence in Scotland with Towry employing 70 in Aberdeen, Edinburgh, and Glasgow, and Tilney Bestinvest employing 55 in Edinburgh and Glasgow.
The deal, which requires regulatory approval, will achieve an ambition of Tilney Bestinvest to have a presence in Aberdeen where Towry currently employs 13 staff in its office in the city.
The combined business, employing over 240 financial planners and 120 investment managers, will operate from a network of more than 30 offices across the UK providing full national coverage.
Peter Hall, chief executive of Tilney Bestinvest who will lead the enlarged group, described the deal as “transformational”.
“It will position the combined group as one of the leading UK wealth management firms providing both financial planning and investment management services,” he said.
“Recent changes to pensions have increased further the need for high quality financial advice and investment management and together we will be well placed to help people in this complex area.”
Rob Devey, chief executive of Towry, said: “Moving forwards, the combined business will be able to offer an even wider range of services for clients and career opportunities for employees in all parts of the UK.
“I am confident that the enlarged group will continue to thrive under Peter Hall’s leadership.”
Palamon originally acquired John Scott & Partners, a small founder-led wealth manager in England with £250m of assets under management, in 2003. It then embarked on an ambitious buy-and-build strategy to roll out the John Scott model, which included the reverse take-over of Towry Law in 2006 and the acquisition of the UK subsidiary of Edward Jones in 2009.
Towry went on to complete a further six acquisitions including Ashcourt Rowan in 2015, which added £2.3 billion of client assets.
Daan Knottenbelt, partner at Palamon, said it had been a “tremendous experience” to have developed Towry into a leading national wealth manager with £120m of revenue and more than £9bn of client assets.
He paid tribute to the Towry management team and board, saying they had “executed the mergers and acquisition plan to perfection”.