W.h. Ireland Share Discussion Threads

[gargoyle2] 03/3/2016 05:59

Interesting from the FT today. I'm fully expecting WHI to be part of this consolidation. Reckon Polygon and Oceanwood are thinking the same thing.
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Wealth managers hunting for greater scale to better tackle rising costs and more stringent regulation are driving mergers and acquisitions in the sector to levels not seen in almost a decade, according to research from Scorpio Partnership consultancy.

However, the volume of deals — 124 in 2015, up from 83 the year before — disguises the fact that the overall level of assets under management changing hands actually fell as midsized managers scooped up smaller rivals.

Scorpio reports that M&A activity saw $410bn of assets transferred in 2015, compared with $460bn the year before. However, both figures pale in comparison to the $780bn that changed hands in 2013, generated by 100 deals.

“There is a fascinating change in the landscape going on,” said Jeremy Grime, financials analyst at Panmure Gordon. “The market is changing exponentially, driven by pension freedoms .R01;. . and the growth of defined contribution schemes.”

The cost of financial advice has risen, as has the size of the overall wealth management market, Mr Grime added. “Private equity [firms] have seen this,” he said. “There is no doubt that the market is growing hugely.”

Private equity groups have been snapping up wealth managers. Permira, the European buyout group, acquired Bestinvest, a UK private client firm, in 2014, followed by four of the regional arms of Tilney, the former stock broker, a few months later.

Two years before that, Bridgepoint merged newly acquired Quilter & Co with Cheviot Asset Management to create Quilter Cheviot, one of the UK’s largest private wealth managers, which in turn was bought by Old Mutual in 2014.

The rise in M&A activity has not been limited to the UK. Swiss private banks and wealth managers have been behind some of the larger deals over the past year, Scorpio’s research revealed.

“Swiss private banks have been very successful in setting themselves up and providing services to the customers, but they need to expand,” said Martha Boeckenfeld, chief executive of Kleinwort Benson, which itself is being acquired by Société; Générale.

“There are a number of players in the UK market that are between £5bn-£15bn, which means it is more challenging to achieve the necessary scale of business to be efficient,” Ms Boeckenfeld added.

“The regulatory environment gets tighter and the costs get higher if you don’t have the respective scale. There is a huge pressure on pricing, with more and more digital coming into the market.”

For Jamie MacLeod, chief executive of the UK wealth management division of Bordier & Cie, the Swiss private bank, the challenge for the industry was to answer what the benefits were for the customer.

“It is important that clients who entrust their assets to the industry feel the benefit of corporate change; [it cannot just] be about shareholder interests,” he said. “Trusted advisers must not be lost in corporate deals.”

[cabreado] 23/2/2016 19:55

The oven is pretty hot. Careful you may burn your fingers.

[gargoyle2] 23/2/2016 08:52

Glad that's out of the way. Fine less than I had been expecting. Placing at 90p is a good result, imo. Coming only 6 days before the FY results announcement, I assume Oceanwood and Polygon received some sort of comfort about the numbers and the outlook. I'm not suggesting that any inside information was disclosed to them of course. That sort of thing doesn't happen any more.

[cabreado] 23/2/2016 07:52

Well deserved. Placing at 90 doubt it.

[darrener] 06/1/2016 08:21

Heard a rumour around Christmas - checked the FCA register to confirm

[gargoyle2] 05/1/2016 16:42

Where did you hear that news, Darrener? Doesn't surprise me. The compliance guy must either have been complicit in the wrongdoing or asleep at the wheel, imo. I would hope that his and Lowe's leaving will show the FCA that the company is serious about changing their practices. I assume they will be hiring an experienced head of compliance in due course.

[meijiman] 05/1/2016 14:32

Sounds Chinese -like Chairman Mao -haha.
Didn't know that. Must have strengthened Killingbecks' hand all round then.

[darrener] 05/1/2016 14:14

Is it coincidence he went the same day as Chairman Lowe?

[meijiman] 05/1/2016 09:48

No he got rid of the previous ceo for wrongdoing!

[gargoyle2] 05/1/2016 05:29

It sounds like he was pretty inactive back in 2013 as well!

No mention of a Head of Compliance amongst WHI's 'key people':

[darrener] 04/1/2016 17:06

It would appear the Compliance Director is "inactive" according to the FCA register and has been since the 2nd December.

[tanelorn] 04/1/2016 12:18

Gargoyle2> You are absolutely correct, the route cause was prior to his stewardship. My problem is with how the matter has been handled subsequently.

[gargoyle2] 03/1/2016 15:17

Bad press, but there's nothing new in the article. I'm not sure Killingbeck is the right person to blame here. As far as I know, the likely substantial fine from the FSA relates to practices during the first 6 months on 2013 -- he only became CEO on 1 January that year, and so it's likely in my view that he just didn't know what was going on. Lowe is probably at fault, having been chairman for a few years before that, and he's now gone (I assume that he was forced out once the extent of the bad practices, and the size of the likely fine, became known internally).

[tanelorn] 03/1/2016 11:54

More Bad press...( see lilac coloured box halfway down page ) ...

Richard Killingbeck, in my opinion, has placed WH Ireland in serious jeopardy. I doubt this 143 year old firm which has thriven through trials and tribulations can survive Killingbeck's hmmm ah, management skills. imo dyor etc.

[onjohn] 27/12/2015 09:34

1

Panmure Gordon fell 20% yesterday " after it warned of a decline in capital markets transactions" - according to a lead article on page 1 of today's FT.

At one point Panmure was 40% down yesterday.

The FT article continues " Aim- Panmure Gordon's focus- performed particularly poorly with a 47% drop in new equity issues".

Page 1 of today's FT refers.


Phillip Wale, chief executive, said they had had “two fairly substantial deals booked for December but the market is just not ready for them so we moved them in January. I don’t think anyone has had a great second half.

“It’s been one thing after another — a massive spike in volatility around August/September, concerns about China and a commodities sell-off.”

Panmure Gordon’s profit warning comes as the London Stock Exchange group cautioned last week that companies had shied away from issuing equity, and bond trading had slipped as rock-bottom interest rates suppress yields.

[tanelorn] 20/12/2015 15:00

Has anyone done a google search for 'WH Ireland' - I wouldn't like to work for their PR department.!!!

[gargoyle2] 18/12/2015 14:45

I wonder if the fact that the directors now realize that there will be a substantial FCA fine is the reason why Lowe resigned as chairman recently. It happened on his watch, so that has to be a possibility.

Other than the FCA fine, I thought the update wasn't too bad, given the market conditions. I did wonder though about the apparent adjustment, when comparing AUM against last year, for 'the announced office closures and business line exits'. I can understand the adjustment for business line exits, but should they really be adjusting for office closures? Surely when you close an office, the plan is to migrate that office's clients to another office, not just assume that those clients will disappear. Seems to me like they are massaging the numbers on that one.

I'd be disappointed not to see some more insider buying at this level. Either Killingbeck (who was buying in August at 122p) or Polygon/Oceanwood (both of which were buying in the autumn). My money is still on a takeover of the company within the next year or two.

[sportbilly1976] 18/12/2015 13:39

Having discretionary funds available from clients on an IPO you've underwritten I guess (if shown to be the case)....there was always going to be the temptation to support the Corp Finance desk.

conflict of interest surely hence the assumed FCA investigation

[a2584728] 18/12/2015 13:36

Investing people's monies their own IPOs I think and then losing vast sums of the investment.

[meijiman] 18/12/2015 12:43

what is this wrong doing that is referred to?

[a2584728] 18/12/2015 08:13

Worth 50p max IMHO.

[gargoyle2] 16/12/2015 14:26

Trading update here this week, I understand.

Will be interesting to hear if the Private Wealth Management division has suffered funds withdrawals after the negative publicity of a few months ago. Recent market volatility can't have been helpful either.

Pretty concerning that Rupert Lowe left so suddenly too. I did speak to the company about that and was told that they had nothing to add over and above what was stated in the RNS. There has to be the suspicion that he fell out with the CEO over something, but who knows.