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Private bank giant a big buyer in £87m wealth IPO

Private bank giant a big buyer in £87m wealth IPO

Lombard Odier has taken a 7.5% stake in private client business Tatton Asset Management on behalf of its clients, following its admission to trading on AIM in an £87 million fund raise last week.

The Swiss giant purchased 4.1 million shares in the firm for its client portfolios, joining a register dominated by investment bluechips including BlackRock, Legal & General and Schroders.

The transaction is dated to the company’s market debut last week which would value to stake at £6.5 million at the offer price of 156p per share, or £7.7 million at today’s 185p.

Lombard Odier did not return a request for comment. Tatton runs around £4 billion on behalf of its clients, and reported a £2.1 million profit in 2016, on revenue of £12 million.

The company operates via three divisions: Tatton Capital, support service provider Paradigm Partners and Paradigm Mortgage Service. 

Speaking to Wealth Manager sister title New Model Adviser last week, Tatton chief executive Paul Hogarth (pictured) said that the capital would be used to fund organic expansion rather than an explicit buyout strategy, although the company remained open to the right potential purchase.

‘The business has matured and grown to the point I feel I have driven it forward as best I can [privately],’ he said.

‘I looked at the options, such as bringing on some debt or selling part of the business to private equity. But I always thought there was a danger of losing control and the best route that fulfilled all requirements was an IPO and floating on AIM.

‘We could look at options such as buying DFMs. It would be on-platform, sub-scale ones that could be a big opportunity for us. We would also look at buying another IFA support service we could work closely with.’

According to Reuters shareholder data, Lombard Odier is now the third largest holder of the stock, behind Hogarth's 18.7% stake and BlackRock's 8%. 

Shrewd investors in the top 10 include Liontrust and Miton, which each own 5.7% of outstanding equity.    

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