Investec creates £300m asset firm

INVESTEC is combining its private-client and fund management business with wealth manager Rensburg to create a major asset management business worth £300m.

Its Carr Sheppards Crosthwaite business will merge with Rensberg, leaving Investec a 63.6% owner of the new business.

That will trigger a multi-million pound shares windfall for around 60 senior Carr Sheppards managers, representing some 5% of that firm's share in the new group, Investec managing director Bernard Kantor said.

Rensburg shareholders will receive a £10m cashback, expected to be worth 45p per share once the merger completes. The new firm will have £9.6bn of funds under management.

Neither Investec nor Rensburg expect any job losses among professional advisers with Carr Sheppards' business based largely in London and the South and Rensburg in the North. TThere is room, however, for 'rationalisation' among the 150 back office and IT staff in the yet-to-be named new firm, Rensburg chief executive Mike Burns said.

The new entity will be chaired by Christopher Clarke, current chairman of Rensburg, with Burns remaining as chief executive. Carr Sheppards' chief executive Steve Elliott becomes managing director.

At 30 September, Carr Sheppards managed £5.7bn of assets for private clients, corporates and charities, 63% on a discretionary basis. At 31 May, Rensburg had £3.9bn of funds.