Tilney Smith & Williamson to be listed or sold by PE owners

Private equity groups Warburg Pincus and Permira are preparing to list or sell wealth manager Tilney Smith & Williamson as they seek to exit their investment 18 months after a merger, according to people familiar with the situation.

The people said the wealth manager, the UK’s third largest with £56bn in assets under management, would be valued between £2bn and £3bn. Evercore had been appointed to advise on the sale, one of the people said.

One of the people said a secondary sale to private equity was a possibility, although an initial public offering was also being considered. A similar tactic was employed by Interactive Investor’s private equity owner JC Flowers, before UK-based asset manager Abrdn agreed to buy it for £1.5bn in cash in December.

Tilney, Warburg Pincus, Permira and Evercore declined to comment.

The prospective transaction comes on the heels of a flurry of dealmaking in the wealth and asset management industries in 2021 that is expected to continue this year, as firms compete to scale up and keep fees low.

Financial services deals in the UK hit a five-year record of 252 in 2021, according to consultancy EY, up from 134 in 2020. The number of wealth and asset management deals also doubled, with deal value increasing from £1.2bn to £10.5bn in the same period.

Founded in Glasgow in 1881, Smith & Williamson was bought in 2019 by rival Tilney — which had been owned by Permira since 2014 — for £625mn, although concerns about the takeover raised by the UK’s Financial Conduct Authority delayed the merger for a year. Warburg Pincus injected £250mn into the group in 2020 to help get the merger with Smith & Williamson over the line.

“We are delighted to have successfully completed this major transaction against what is unquestionably a highly challenging economic backdrop,” Will Samuel, chair of Tilney Smith & Williamson, said when the deal closed.

Tilney’s assets were boosted by net inflows of £1.8bn in the first nine months of last year. Operating income grew to £395mn in the same period compared with £175mn a year earlier, reflecting the effects of the merger as well as organic growth, the company said.