Tavistock is to sell its £1bn multi-asset arm to recently-formed DFM consolidator Titan Wealth in a £40m deal.
The deal is part of a 10-year strategic partnership between Tavistock Investments and Titan, announced on Monday, with Tavistock acting as Titan’s retail distribution partner and retaining Titan as the investment manager for its centralised investment proposition.
Titan was set-up by James Kaberry, a founder of Pantheon Financial Management, and M&A expert Andrew Fearon, with backing from Ares Management, Maven Capital Partners and Hambleden Capital.
Tavistock said the deal will help to accelerate the growth of its wealth management business, which has about £4bn of funds under management, both organically and through an acquisition programme.
Tavistock rebuffed a takeover bid from Jersey-based fund manager Team earlier this year as Tavistock considered Team’s shares as illiquid.
Tavistock chief investment officer John Leiper and his investment team will become part of Titan and will continue to work closely with Tavistock and its advisers.
Accelerate growth and value
Tavistock chief executive Brian Raven (pictured) said: “This is a great opportunity for both companies. Whilst Tavistock Wealth is becoming part of Titan, we will still be working closely with our highly successful investment team.
“The partnership with Titan endorses our corporate strategy and will enable us to accelerate the growth of our business and deliver maximum value to our shareholders.”
In its audited accounts for the year ended 31 March, Tavistock Wealth reported a pre-tax profit of £2.3m from gross revenues of £5.6m and gross assets of £5.2m. Tavistock said the transaction will enhance its cash resources and enable it to minimise shareholder dilution as it embarks on an accelerated acquisition programme.
Titan is simultaneously seeking to acquire Global Prime Partners, a provider of platform services to institutional clients and funds managers.
The acquisitions are expected to complete in Q2 2021, subject to regulatory approval.
After the completion of the deals, Titan will have assets under management and administration of £3bn. Titan said it is in discussions about the acquisition of six other DFMs.
‘State of flux’
Titan Wealth Holdings joint-CEOs James Kaberry and Andrew Fearon said: “The DFM sector is currently in a state of flux with considerable dislocation and outdates processes as technology and client demand evolve ever more quickly.”
They added: “Against this backdrop, we have the opportunity to drive reform in the sector, through leveraging new technologies and broadening distribution channels to deliver value for intermediaries and institutional clients. With the market ripe for consolidation, we have ambitions to grow rapidly and see exciting opportunities in the coming months as we target £20-£30bn in assets under management over the next five years.”
Another wave of consolidation
Independent wealth expert Adrian Lowcock said: “The deal could be the start of another wave consolidation in the DFM space as Titan was launched with the view to consolidate the DFM sector and provide updated solutions in this space.”
He added: “The 10-year strategic partnership is also good news for Titan and Tavistock clients and should allow for a smooth transfer of the business and be more seamless for the clients.”
