The losses, incurred over the year ending 31 December 2013, were largely attributed to a “challenging low interest rate and tight credit spread environment” as well as the company’s “cautious approach” to balance sheet management, and its investment in banker hires and systems infrastructure enhancements.
However, the division posted a boost in total AUM which increased by 14%, ending the year at £5.9bn. Over half this growth was due to £399m positive net inflows across both investing assets and deposits. Positive market movements accounted for a further £321m of AUM growth compared with 2012.
The AUM within the segment’s discretionary and advisory investment offerings increased by 13% from £3.8bn to £4.4bn.
Ownership reshuffle
In the statement, details of the acquisition were published, in which parent company RHJ International acquired BHF for €340m (£281.5m). The deal now sets out a new ownership structure in which Kleinwort Benson owns a total cash consideration of €309.4m, or 91% stake in BHF.
Kleinwort’s ownership structure also witnessed a reshuffle as three new investors laid claim on shares. Chinese investor Fosun gained hold of a 19.2% stake, following its investment of €98.5m. German entrepreneur Stefan Quandt holds a 12.4% stake after handing out €63.7m. Finally, the Timothy Collins’ Windmere and Collins trust took on a 2.7% stake following its €13.6m investment.
RHJ International said it had been a “mixed year” for Kleinwort Benson Wealth Management.
“We have seen good growth in our asset base and loan portfolio, with growing momentum in the business reflected in the new business flows being generated by our senior banker hires, recent mandate wins and the quality of our pipeline. Against this, the business generated a segment loss of £11.7m,” the company said in its annual results statement.
