BREWIN Dolphin has raised around £40 million to beef up its balance sheet and provide funds to help it acquire teams that will bring more clients in key areas including Scotland.
The wealth manager tapped institutional investors for £39.9m before expenses yesterday in a placing under a plan to ensure it is in shape to cope with challenging economic conditions and to capitalise on the opportunities presented by regulatory reform.
The company, with five offices in Scotland, said one third of the placing proceeds will be used to increase equity capital and associated solvency levels to at least 150%, from around 120% previously.
"The continuing uncertain economic environment means that clients and stakeholders seek an investment manager which operates with a conservative balance sheet," said the company.
Announcing that underlying profits increased by 26% to £23.8m in the 26 weeks to March 31, from £18.9m last time, Brewin Dolphin said it sees significant opportunity to grow its business following implementation of the Retail Distribution Review (RDR) from December 31.
This barred firms that provide investment products from paying commissions to advisers, whom it required to hold a qualification.
Brewin Dolphin believes RDR will prompt some smaller players to quit the market presenting opportunities for bigger fish.
The company said: "The market is continuing to adapt to the post-RDR environment and Brewin Dolphin is seeing significant opportunities to continue to invest in the acquisition of new client teams and funds under management."
It added: "In particular Brewin Dolphin plans to further build its client base in strategic regions such as the south east of England."
In December, former executive chairman Jamie Matheson indicated Brewin Dolphin may seek to accelerate growth in Scotland by recruiting teams and individuals from rivals.
A veteran of the Glasgow stockbroking industry, Mr Matheson retired from Brewin Dolphin in March after eight years as executive chairman.
Chief executive David Nicol said the company has made good progress against the objectives set in a growth strategy in 2011, including growing the amount of higher margin discretionary funds under management.
Total managed funds increased by £2.2bn in the first half, including £2.1bn due to rising markets, to £28.1bn. The placing was completed at 210p per share.
Shares in the company closed up 10.5p at 230.3p.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article