Potential Sale of Evelyn Partners in Motion

According to sources familiar with the matter, the private equity owner of Evelyn Partners, one of the largest wealth management firms in the UK, is planning to sell the business. NatWest and the Royal Bank of Canada have emerged as possible buyers.

This move reflects ongoing consolidation within the UK wealth management sector. Permira and Warburg Pincus, the current owners, have engaged investment bank Evercore to assist with the sales process.

As banks aim to expand their asset management holdings amid increasing demand for financial advisory services, Evelyn is also expected to attract interest from private equity firms and U.S. wealth managers wanting to enter the UK market, such as Raymond James.

The potential sale could further drive the trend of integration among European wealth managers, seeking to fortify themselves against regulatory pressures. This development follows NatWest’s return to full private ownership in May after the government bailout during the 2008 financial crisis.

One insider indicated that NatWest might consider a bid for Evelyn. The FTSE 100 Bank previously had early discussions regarding a possible acquisition, the source added.

This sale marks an exit for Permira, which has owned Evelyn since 2014. The firm was formed by merging rival Tilney with online wealth manager Best Invest. In 2020, Warburg Pincus invested in the merger of Tilney and Smith & Williamson, which was subsequently rebranded as Evelyn.

Last year, Evelyn’s Professional Services Arm was sold to Apax, allowing the group to concentrate on asset management.

Asset management fees are generally viewed as a more stable revenue stream compared to income from interest-dependent lending. Still, some investors express caution about acquiring wealth management firms that might negatively impact the bank’s stock price due to their higher revenue multiples.

NatWest’s CEO, Paul Thwaite, has consistently highlighted the bank’s focus on growth in its asset management divisions, including the ultra-high-net-worth bank, Coutts.

Analysts are optimistic that NatWest will pursue significant deals following its return to complete personal ownership. Recently, NatWest attempted to acquire Santander UK’s business but was unsuccessful and withdrew from a bid for TSB, which was sold to Santander.

Last year, NatWest also acquired a majority stake in Sainsbury’s Bank and made a notable £2.5 billion mortgage deal with Metro Bank.

Thwaite remarked at a Financial Times Banking Summit last year that such deals reflect an intent to pursue valuable opportunities for strategic fits, while emphasizing that any acquisition targets should meet specific criteria and that growing the group organically is a priority.

In 2022, RBC’s CEO indicated a desire to expand their UK asset management footprint and had already acquired Brewin Dolphin that same year. He mentioned that once that acquisition was completed, they would look for additional smaller targets to integrate.

Paul Geddes, the CEO of Evelyn, previously worked for the Royal Bank of Scotland and rose to prominence in the UK retail banking landscape. The sale of Evelyn is seen as a significant shift in the wealth management arena, especially with Geddes taking the helm in 2023 as the firm heads toward a public listing.

Evelyn, Permira, and Warburg Pincus have chosen not to comment. Both NatWest and RBC have stated they won’t address “market speculation,” and Raymond James has not responded to requests for comments.