Bridgepoint makes 3.1x on wealth manager

The exit comes days after PEI revealed the firm was 80% of the way to its fund target

London-based Bridgepoint has sold its majority stake in UK private wealth manager Quilter Cheviot to Old Mutual in a transaction worth £585 million, according to a statement from the firm.

An investor source told Private Equity International that the sale generated an exit multiple of 3.1x and an internal rate of return of 55 percent. Bridgepoint confirmed these figures were accurate.

The sale comes days after PEI revealed that Bridgepoint had amassed €2.8 billion for its latest vehicle, Bridgepoint Europe V, which officially came to market in May. An investor source told PEI that the firm recently held a first close “north of €2 billion” and has now raised 80 percent of the fund’s €3.5 billion target. The fund is expected to close on its €4 billion hard-cap by the end of the year.

Bridgepoint acquired Quilter & Co from Morgan Stanley Smith Barney at the end of 2011 with funds from Bridgepoint Europe IV, a 2008-vintage vehicle which closed on €4.84 billion. On acquisition Quilter had around £7.6 billion of funds under management, around 350 staff and a regional network of 13 offices throughout the UK, Jersey and Ireland.

Under Bridgepoint’s ownership the company completed an off-market £95 million acquisition of discretionary investment firm Cheviot Asset Management in 2012, creating Quilter Cheviot. The firm has nearly doubled the business’s assets under management to £16 billion. The company was refinanced in 2013.

Bridgepoint, which has offices throughout Europe and a portfolio development office in Shanghai, focuses on acquiring companies valued up to €1 billion. Through a separate fund, Bridgepoint Development Capital, the firm also provides funding – typically buyouts – for companies valued up to €150 million, according to Bridgepoint.

Bridgepoint Europe IV is now fully deployed, but it is understood there is some capital remaining for add-on acquisitions. This vehicle secured a 12-month investment extension in 2013 after it became apparent it would not need to fund as many add-on acquisitions as planned.

It is understood that so far in 2014 Bridgepoint has returned €1.65 billion to the fund’s investors. In April the firm exited German-based chemical manufacturing business CABB International, netting a 2.4x return. Three months later the firm sold SPTS Technologies Group to Israel-based technology business Orbotech for $370 million in cash, generating a 2.6x return and an internal rate of return of 35 percent.