Canaccord buys £54m Adam & Co private client unit

Canada’s Canaccord Genuity Group announced on Thursday it agreed to acquire the private client investment management business of Edinburgh-based private bank Adam & Company for £54 million from RBS-NatWest.

The Canadian group said a retention plan will be implemented for key Adam & Company employees “based on client assets and continued employment over a four year period.”

Canaccord Genuity is making the acquisition through CGWM UK, its wealth management business in the UK.

The Adam & Company private client business has assets totaling £1.7 billion, which are managed on a discretionary basis.

“The acquisition represents a unique opportunity for Canaccord Genuity Wealth Management to enter the Scottish market with a deeply established franchise and a strong brand,” said Canaccord Genuity.

“CGWM UK intends to continue to operate the business under the name of Adam & Company.

“The business’s core client proposition will remain largely unchanged, and the existing direct relationships between clients and portfolio managers will not be affected.

“As part of CGWM UK, the investment professionals and clients of the business will also have access to the broad range of resources and expertise in the areas of global and small cap equities, ESG and fixed income offerings, in addition to its robust suite of retirement, later life care and inheritance tax (IHT) planning capabilities.

“To help facilitate this, Adam & Company’s investment team will become active members of CGWM UK’s existing investment committees.

“With a common operating and technology platform, transition to CGWM UK is expected to be seamless to clients and investment professionals.

“Graham Storrie, Managing Director of Adam & Company, will continue with the business in a leadership role.”

CGWM UK CEO David Esfandi said: “Entering the Scottish market represents a very important milestone in our long-term growth strategy and we are pleased to be doing so with Adam & Company’s investment management business, a leading regional franchise with a strong cultural fit and a similar client base to our own.

“We are delighted to welcome this team of deeply established investment professionals, and we look forward to supporting their continued growth and commitment to providing the best possible outcomes for their clients.”

Adam & Company MD Graham Storrie said: “To build on the success of Adam & Company’s investment management business it was essential to find a buyer who shared our investment philosophy and strategic ambitions for the future.

“I believe that with CGWM, we will be able to offer our clients in Scotland and beyond the continuity and high quality service they deserve, and I am delighted to have the opportunity to continue to lead this business.”

CGWM UK said that during the period to completion, it intends to establish a new office location for the Adam & Company investment management business in central Edinburgh.

“The transaction is to be effected through a Business Transfer Agreement that will result in CGWM UK acquiring both the shares of Adam & Company Investment Management Limited (AIM) as well as certain assets from RBS, including the Adam & Company brand, certain intellectual property and client contracts,” added Canaccord Genuity.

“Portfolio managers and supporting employees who are currently employed by RBS yet dedicated to Adam & Company’s business will transfer to CGWM UK.

“Both CGWM UK and Adam & Company operate on the Avaloq platform, and the parties have agreed a detailed migration plan which will be implemented after signing.

“During the year ended December 31, 2020, Adam & Company’s investment management business held average assets under management of £1.6 billion (C$2.8 billion), and generated revenue of approximately £12.5 million (C$21.6 million).

“A retention plan will be implemented for key employees based on client assets and continued employment over a four year period.

“Closing is subject to regulatory approval and other customary closing conditions.

“The acquisition is expected to be completed during the quarter ended September 30, 2021, which will be the end of the second fiscal quarter of the company’s 2022 fiscal year.

“Raymond James Financial International Limited acted as financial adviser and Farrer & Co LLP acted as legal adviser to CGWM in connection with the transaction.

“Evercore acted as financial adviser and Pinsent Masons LLP acted as legal adviser to NatWest in connection with the transaction.”

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Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.