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Warburg Pincus to invest in Tilney Smith & Williamson merger

Warburg Pincus will co-invest in Tilney and Smith & Williamson’s revised transaction structure for their proposed merger, alongside funds advised by Permira.

Since the deal was first announced in September 2019, both firms have been involved in planning for the combined business.

The combined group will be known as Tilney Smith & Williamson, and will become one of the UK’s largest integrated wealth management and professional service businesses following the deal.

It will have GBP 44 billion in AuM, and generate around GBP 530 million of revenue. The combined business is expected to be the fourth largest UK wealth management business ranked by AuM and the sixth largest UK professional services firm measured by fee income.

“This transformational deal brings together two highly complementary and successful businesses, with shared values of focusing on our clients and high standards of professionalism,” said Chris Woodhouse, chief executive of Tilney.

Tilney Smith & Williamson will be Warburg Pincus’s sixth investment in a wealth management company, and the deal is expected to be completed in the second half of 2020. 

Smith & Williamson’s management will be rolling the majority of their investment into the equity of the combined group. AGF, Smith & Williamson’s largest shareholder, will fully exit its investment in the group upon completion of the transaction. 

The revised structure will result in a reduction in external debt, lower ongoing financing costs and an improved regulatory capital position, according to the companies.

David Cobb and Kevin Stopps, co-chief executives of Smith & Williamson, commented: “It is testament to the outcome that we have been striving for and the strong working relationship between all parties that we have been able to reach this agreement despite the COVID crisis.”

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