Warburg Weighs Buying Tilney Stake From Co-Owner Permira
Warburg Weighs Buying Tilney Stake From Co-Owner Permira
(Bloomberg) -- Warburg Pincus is considering taking full control of Tilney Smith & Williamson Ltd., the wealth manager it owns with peer Permira, according to people familiar with the situation.
The private equity firms have been studying options for the business, including a sale or initial public offering, as Permira looks to exit its investment. Warburg Pincus, which invested in the business in 2020, has first right of refusal on Permira’s share, the people said.
Deliberations are at an early stage and there’s no certainty of a deal between the two private equity firms, the people said. Representatives for Permira, Tilney Smith & Williamson and Warburg Pincus declined to comment.
Permira acquired Tilney in 2014, with Warburg Pincus coming when it was merged with Smith & Williamson as regulators were worried the business was too levered. Warburg Pincus also owns the Spanish wealth manager Singular Bank, which last year acquired UBS Group AG’s wealth management business in the country.
Should Permira and Warburg Pincus decide to pursue a sale of Tilney Smith & Williamson, it would offer a rare chance for a buyer to acquire a sizable wealth business and could attract interest from other private equity firms, wealth managers and banks drawn to the stable, recurring fees that clients pay on assets.
JPMorgan Chase & Co. is among the banks that have been buying asset and wealth managers in Europe, with Morgan Stanley also expanding in the sector. Societe Generale SA’s attempt to sell its U.K. private bank Kleinwort Hambros in 2019 drew interest from Julius Baer Group AG and EFG International AG, though a deal eventually fell through.
Listing the business could prove more difficult in light of recent stock market volatility. Downturns can also hit the value of investment firms if spooked retail clients look to withdraw assets or de-risk by switching to lower-fee generating products.
Led by Chief Executive Officer Chris Woodhouse, Tilney and Smith & Williamson managed assets of 56 billion pounds at the end of September and has been expanding via acquisitions, including those of advisory firms HFS Milbourne and FP Solutions.
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