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Tilney Bestinvest to buy Towry in £600m deal

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Tilney Bestinvest to buy Towry in £600m deal

Tilney Bestinvest is to buy rival Towry for £600 million to create one of the UK's largest wealth management firms.

The combined entity will continue to use both brands in different parts of the market while it undertakes a review of branding, with Tilney Bestinvest chief executive, Peter Hall (pictured right), leading the enlarged group. 

'This sale is the culmination of our hard work over the last two years to complete the transformation of Towry to make it one of the national leaders in the UK wealth management sector,' Towry chief Rob Devey (pictured left) said.

'Towry and Tilney Bestinvest are an excellent fit with both firms having highly skilled teams that provide top quality financial planning and investment management services to clients. Moving forwards the combined business will be able to offer an even wider range of services for clients and career opportunities for employees in all parts of the UK.'

Meanwhile Hall described to tie-up as 'transformational'.

'This is a transformational deal that will position the combined group as one of the leading UK wealth management firms providing both financial planning and investment management services,' Hall said. 

'Recent changes to pensions have increased further the need for high quality financial advice and investment management and together we will be well placed to help people in this complex area.'

The deal, which remains subject to regulatory approval, comes after private equity firm Palamon put Towry up for sale before Christmas, sparking a bidding war which was whittled down to four potential suitors.

Towry runs £9 billion in assets, 85% of which are held in its discretionary business. It employs more than 900 staff across 21 regional offices.  

The combined business will comprise 240 financial planners and 120 investment managers, operating from a network of more than 30 offices.

More than 80% will be managed in discretionary services, with more than 40% of assets managed on behalf of clients with over £1 million.   

The transaction has received the full-backing of Tilney Bestinvest owner Permira, which sanctioned its acquisition of Ingenious Asset Management earlier this year.

'Since acquiring Bestinvest only two years ago with assets and revenues of £5 billion and £39 million, the Permira Funds have backed Peter Hall and his team to build one of the largest and fastest growing players in the UK wealth management market,' Permira partner and co-head of the financial services team Philip Muelder said.  

'With over £20 billion of assets and £200 million of revenues once Towry is acquired, the group will have the scale to continue to invest to enhance its range of services for clients and will be well positioned to take advantage of the increasing demand for advice which presents significant growth opportunities.'

Palamon originally acquired John Scott & Partners, a small founder-led wealth manager with £250 million AuM in 2003, having identified the potential to build a national leader of scale in the highly fragmented financial advisory sector.   

The private equity house subsequently led an ambitious buy-and-build strategy to roll out the JS&P model, which included the reverse takeover of Towry Law in 2006 and the acquisition of the UK subsidiary of Edward Jones in 2009.

Following the introduction of the retail distribution review in 2013, Towry made six further acquisitions taking advantage of this disruptive new regulatory forces. The buys included Ashcourt Rowan in 2015.

If the sale goes through, Palamon's will receive a return on its initial investment of 13 times.

'It has been a tremendous experience to have executed a transformational growth strategy that saw Towry develop from a single office in Marlow with £5 million of revenue to become a leading national wealth manager with £120 million of revenue and more than £9 billion of client assets,' Palamon partner Daan Knottenbelt said.

He added: 'This is another highly successful Palamon investment that demonstrates the power of our thesis-led strategy to identify, and invest into, long-term growth trends.' 

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