Bridgepoint buys wealth manager in all-equity deal

The European buyout group plans to re-finance wealth management firm Quilter at a later stage, having acquired the business from Morgan Stanley in a deal worth about £175m.

After previously unsuccessfully trying to buy Quilter, UK mid-market firm Bridgepoint has sealed the acquisition of the wealth management group from Morgan Stanley Smith Barney.

The firm would not disclose any financial details, but sources with knowledge of the matter said its value was around £175 million (€210 million; $272 million). 

Quilter manages £7.6 billion of funds, with clients such as pension funds, charities and high net worth individuals. The business has 13 offices across the UK, Jersey and Ireland, according to a company statement, and hopes to grow the profitability and assets under management of the business.

The firm financed the buyout using only equity, but is likely to refinance at a later stage, according to Private Equity International's source. It is unclear why the firm has chosen to structure the deal like this, but more firms are finding leverage hard to raise due to tightened lending from banks.

Oliver Wyman, PWC, Evercore, Linklaters and Weil Gotshal Manges advised on the deal.

Ian Bagshaw, a partner at law firm Linklaters, said in a statement: “This is a significant deal, both in the manner of its funding – it’s been funded by equity rather than debt – and because it is one of the first deals where private equity is acquiring a FIG [financial institutions group] asset.”

A source familiar with the deal said that this was Bridgepoint’s second venture into a financial institutions group. In 2005, the firm acquired Tilney Investment Management using its Bridgepoint Europe II fund. In 2007, Deutsche Bank approached the firm with a reported offer of £350 million for the business to which Bridgepoint agreed. 

The source said Bridgepoint would act as a strategic investor and would not have any influence or involvement with the allocation of Quilter’s assets. 

The firm makes the investment from its fund Bridgepoint Europe IV, which currently stands at around 65 percent deployed, according to a source. This deal is the fifteenth from the fund and comes a month after the firm acquired Wiggle, an online cycling retailer founded in 1999, from UK private equity group Isis Equity Partners for a sum of £180 million.