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Wealth firm faces more upheaval after sudden CEO exit

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Wealth firm faces more upheaval after sudden CEO exit

Kingswood Holdings – which traded as European Wealth until 2017 before rebranding its public face KW Wealth – has announced that chief executive Marianne Ismail (pictured) is to exit after just 18 months at the helm.

The departure ‘with immediate effect’ will leave Kingswood group deputy executive chair Gary Wilder in charge and suggests another round of uncertainty as the parent group strategically re-orientates the business. Wilder is a founder partner of ultimate parent Kingswood Property Finance.

In a profile interview with Wealth Manager at the start of last year, Ismail outlined her vision for the business six months after replacing John Morton as CEO, who himself had only held the post for a little more than a year. 

Ismail's strategy involved a radical restructure of the business, consolidating smaller portfolios to free up individuals with the skillset to build an institutional business.

She also initiated a program of moving staff into central hubs to make management and the sharing of information easier. 

In its most recent update, the business reported £1.8 billion in client assets at the end of June, versus £1.7 billion 12 months earlier. Restructuring costs drove the company £5.9 million into the red in 2017, compared to a £750,000 loss in 2016.  

Alongside South African asset manager Anchor Capital, acting as manager to Mauritian invest company Astoria, Kingswood took effective control of European Wealth in mid-2017 as the former executive team struggled to meet debt obligations.

Group finance director Patrick Goulding will become chief executive of the company’s subsidiaries while chief operating officer Graydon Butler will join the board to direct ‘strategy and performance to ensure financial and other targets are met’.

Alongside last year's rebrand the company faced the setback of a failed merger with US-based broker-dealer platform Newbridge as it attempted to craft a trans-Atlantic conglomerate.

Having ‘restructured and streamlined’ its investment team the business said it would focus on consolidation on both sides of the Atlantic, securing its first buy with the purchase of IFA firm Marchant McKechnie in Yorkshire in October.

Kingswood chair Buzz West said: ‘The board is very grateful to Marianne for her contribution to the business over the last 18 months. We wish her well in her future endeavours.

‘We are delighted that Gary, Patrick and Graydon have agreed to form the senior leadership team that will successfully execute our growth strategy. Their combined experience will be invaluable as we aim to grow both organically and dynamically by acquisition in the UK and US and deliver long-term shareholder value.’

Wilder joined the board in October 2017 as a non-executive director following a 30-year career in real estate, structured finance and private equity, and was appointed executive deputy chair in November 2018.

Alongside Astoria, Kingswood took a significant stake in the business in the summer 2017 as European Wealth raised £8.8 million in new equity as it paid down debt, part of which was owed to Kingswood in the form of a bridging loan.

The company had initially announced that it would rebrand European Wealth as directly part of the Kingswood group before scrapping that option and opting for KW Wealth.

In an update following the announcement, house broker finnCap maintained a target price of 26p - versus the current record low of 12.2p - and said it expected the company to return to profit this year.

'Disruption to the business due to this change in management is greatly diminished by the fact that much of the hard work in terms of restructuring has already been done,' said analyst Nik Lysiuk.

'Scale-up opportunities are higher than that of its peers and so growth opportunities are likely to be high, both in terms of revenues,
profits and share price appreciation.'

 

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