Quilter Cheviot plans active role in industry consolidation

Added 24th August 2016

Having Old Mutual as its parent provides London-headquartered discretionary fund manager Quilter Cheviot with a great deal of opportunity, said chief executive David Loudon, particularly when it comes to acquisitions.

Quilter Cheviot plans active role in industry consolidation

Eighteen months on from the closure of the deal, Loudon said the two businesses have moved beyond the ‘meet and greet’ period that comes with such takeovers, and is now firmly in the swing of finding ways to collaborate with its parent Old Mutual Wealth.

According to Loudon, both Old Mutual and Quilter see the industry continuing to change in the next few years and many of the expected shifts centre on consolidation – driven by regulatory pressure, increased costs and the resultant need to benefit from economies of scale.

M&A target

“The brief I have, which is well known to the wider group is that if we can find suitable acquisitions, not of the size of the coming together of Quilter and Cheivot, but bolt-on acquisitions, then I have every confidence that the business case for it will be supportive," Loudon said.

“Consolidation tends to come in waves,” he added, “we are in the middle of the wave at the moment, it has been going for a couple of years and there is probably more to go in it.”

Asked what sort of businesses they are considering, Loudon said the firm would consider smaller discretionary and advisory businesses.

“We have done quite a lot of research on this. Between £250m and £1bn in AUM there are quite a number of businesses and some of those we would be very interested in talking to.”

Because these sorts of businesses have to have the same sorts of controls in place in terms of compliance and risk as larger firms do, he said he expects that, while it will not be the case in every instance, bigger firms are more likely to survive as they better able to accommodate all the costs.

Of the Old Mutual/Quilter Cheviot deal itself, he added: "It has the makings of something very successful.”

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Geoff Candy

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Geoff Candy joined Portfolio Adviser as News Editor in May 2014. He has been a financial journalist and broadcaster since 2005 and, in that time has worked in both South Africa and the Netherlands, covering everything from high street retailers and construction companies to mining and insurance.

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