According to TMI CEO Mike Balfour, the acquisition is the culmination of a decision taken a few years ago to grow its UK private clients operation to a size that would provide it the critical mass to be sustainable over the long term.
A member of the 128-year old Thomas Miller group of companies, TMI began managing external money ten years ago after being split into a separate investment business within the Thomas Miller group more than 25 years ago. Six years ago it expanded into offshore private client market in the Isle of Man through the acquisition of the Singer and Friedlander, after which it set its sights on the onshore market.
“This acquisition is another step on that path,” Balfour told Portfolio Adviser, explaining that Broadstone is an established business that ticked both of TMI’s major boxes, “It has £400m in assets under management and the core of its business is in London.”
Under the acquisition, TMI is buying Broadstone’s wealth management business and is also bringing over client-facing staff from its pensions business. Broadstone’s MD for private clients, Matthew Phillips, will take responsibility for Thomas Miller Investment’s wealth management operation in the UK and report to Balfour, the group said.
Asked if the purchase of Broadstone was the beginning of bigger acquisition plans, Balfour wouldn’t rule out the possibility of further bolt-on acquisitions down the line, but said the priority for the next six to 12 months was the integration of the two businesses.
“For us, critical mass was £500m which is why the Broadstone deal made sense. But, we are not planning a buying spree,” he said.
He did add, however, that the discretionary fund management industry in the UK is in a state of significant flux at the moment.
“The industry is going through a maturing phase similar to the one the pensions industry underwent 30 years ago. The whole sector is becoming more sophisticated, there is a growing standardisation and consistency of returns being required.
“There are a growing number of gatekeepers and third parties that are evaluating what you do as a business and, in order to compete, one’s systems and processes need to be much more robust, which makes getting to critical mass even more important,” he added.
