W.h. Ireland Share Discussion Threads

[mctmct] 20/9/2016 10:11

Equity Development say the price was 140p:


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W.H. Ireland ("WHI") has gained a new and powerful strategic investor in Kuwaiti European Holdings ("KEH"), the vehicle of the highly respected Al-Humaidi family, which has purchased 23% of the shares at 140p per share, a 39% premium to Friday's closing price. KEH owns substantial businesses in leisure, property, financial services and healthcare, including an investment management company in Kuwait and a FCA-regulated firm in the UK. The FCA has approved a "change of control" allowing KEH to buy up to 29.9% of W.H. Ireland.

We can visualise significant benefits: firstly synergies between WHI and the Kuwaiti investment manager (many Kuwaitis wish to invest in the UK), secondly KEH will use WHI's expertise when making other investments in the UK, thirdly KEH's access to capital can fund any attractive acquisition opportunities that come WHI's way.

The price KEH paid for the shares is a substantial 42% discount to our estimate of a sum-of-the-parts valuation for WHI (of 240p per share), but an almost equal 39% premium to the market price on Friday evening (pre announcement). Paying £8m+ at a significant premium to the market price looks like a strong vote of confidence in the strategies that WHI CEO Richard Killingbeck and his team have been pursuing.

[tez123] 19/9/2016 07:57

Now for the stampede.

[gargoyle2] 18/9/2016 21:29

Tthanks Courant. Interesting. In particular, that they are apparently buying from Marland, Lowe and others. I bet Polygon and Oceanwood (36% plus between them)weren't expecting that!

[courant] 18/9/2016 13:14

hxxp://news.sky.com/story/kuwaiti-investors-pounce-on-venerable-city-broker-wh-ireland-10581918

Should be exciting on Monday!

[a2584728] 21/7/2016 10:57

This company is so poorly managed. They need changes at the top. They are seen as the nomad broker of last resort

[meijiman] 21/7/2016 08:44

Terrible management decisions have resulted in a loss.

[gargoyle2] 04/7/2016 09:15

Looks like Polygon soaking up all the sells here. Good to see. Now over 20%.

[a_mclart] 12/6/2016 08:44

Seems to be going well and no bad press lately? Anyone seen any bad press?

BUT - if there is a brexit it will impact all CITY brokers.

[gargoyle2] 13/5/2016 14:20

Someone selling in 25k chunks today. Wonder if that's Rupert Lowe. I see WHI has a new website, but major shareholder and issued share details are woefully out of date.

[courant] 12/5/2016 14:09

Yes, exactly, thanks!

[gargoyle2] 12/5/2016 13:34

Was it this one, Courant?



Wealth manager Tilney Bestinvest is taking over its rival Towry in a £600m deal that marks further consolidation within the UK’s increasingly buoyant financial advice sector.

The deal brings together two private-equity owned groups — Palamon Capital Partners is selling out of Towry, while Permira, which owns Tilney Bestinvest, is doubling down on wealth management.

The combined group will have more than £20bn of assets under management, giving it much-needed scale in the face of the growing pressures of regulation and increased compliance costs.

In recent months, a rash of mergers and acquisitions has swept across the £1.8tn sector, with a focus in particular on midsized wealth managers with between £5bn and £10bn of assets under management.

Last month, Liechtenstein’s LGT Group acquired a majority stake in London-based boutique Vestra Wealth, and Société; Générale swooped on City stalwart Kleinwort Benson. In February, Tilney Bestinvest bought Ingenious Asset Management, a London-based discretionary investment manager focused on very wealthy clients.

“Scale in central support functions such as operations, IT and compliance will better enable us to service clients. It should also help us get access to the lowest cost share classes when investing our clients’ assets,” said Jason Hollands, managing director at Tilney Bestinvest.

Overall, wealth management deals in 2015 surged to 124 — up from 83 the year before — according to Scorpio Partnership, the wealth management consultancy.

Kevin Pakenham, co-founder of Pakenham Partners, a corporate finance boutique, said: “The point is that by increasing your clients and assets under management you have substantial synergies and the opportunity of having a lower marginal cost of production.

“Almost every asset manager and wealth manager has falling average costs, and under those circumstances a merger is always going to generate additional profits per unit under management.”

However, Eamonn Flanagan, an analyst at Shore Capital, asked whether Tilney Bestinvest had paid too much — at £600m, Palamon is walking away with 13 times its invested capital.

In wealth management, takeovers can mean that everyone gains, says Matthew Vincent.

“[The price] certainly would have been justified at some point given the progress the management have done with Towry,” Mr Flanagan said. “But it just feels a bit rich to me.”

The nature of the UK’s wealth management sector is changing. A growing number of companies are targeting the mass affluent market — those with between £50,000 and £150,000 to invest — by offering computer-driven robo-advice. That has ratcheted up the pressure on managers focused on providing more bespoke — and more expensive — face-to-face advice.

“The UK advice industry has historically been very fragmented but the costs of doing business have risen as the regulatory environment has evolved,” said Tilney Bestinvest’s Mr Hollands.

Daan Knottenbelt, a partner at Palamon, said the firm was not withdrawing from investing in financial services.

“Post the financial crisis, the regulatory framework has changed,” Mr Knottenbelt said. “And that puts pressure on traditional players and opens opportunities for new approaches. For a private equity firm like ourselves that is a hugely interesting dynamic to invest into.”

[data1t] 12/5/2016 13:03

https://youtu.be/JXX3vBZCqS8

[courant] 12/5/2016 12:23

There was an interesting article a couple of months ago regarding consolidation among wealth managers and the prices being paid to acquire AUM. Can't find it again though! But this talies with Polygon's interest here...

[gargoyle2] 12/5/2016 11:05

Nice long term (5 year) investment management contract win announced today, although no values given.

[gargoyle2] 10/5/2016 18:41

Good to see Polygon increasing here, almost 20% now (although most of the increase seems to be them cashing in / exchanging their CFD for real shares). I'm still betting on some corporate action here before too long.

[data1t] 07/4/2016 19:29

Thirsty for money.Let's get it regardless.

[data1t] 05/4/2016 19:31

Once crooks always crooks

[gargoyle2] 07/3/2016 11:06

See my post #1807 re Killingbeck's share ownership terms. He has a very strong incentive to get the share price as high as possible before/at October 2016. Wouldn't surprise me at all if we saw some corporate action before then. All IMO, DYOR, etc.

[courant] 03/3/2016 17:01

Something like that. A while ago I did a comparative evaluation of the UK quotes asset management companies and I think it averaged out at about 2% AUM, so those figures seem reasonable. Of course, the industry is changing so this might not be a good guide going forward, but there is sufficient margin of safety here. I'll see if I can dig out my spreadsheet I used for this.

[gargoyle2] 03/3/2016 08:53

Courant, Equity Development seem to value WHI on the basis of a formula, namely 4% for discretionary AUM, 2% for advisory, 0.5% for execution-only, plus cash and certain other assets (in particular, the Manchester property). Any idea whether that's a typical method for valuing asset management companies?

[courant] 03/3/2016 08:32

Yes, absolutely, my investment thesis here is based on a likely valuation of the asset management side of the business were it to be bought by a larger player. WHI is very cheap on this basis!

[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.