THE financial services heavyweight who chairs 7IM has said the wealth manager is in the market for more acquisitions in Scotland as he underlined his confidence in the prospects for firms in the country.

Adrian Grace shrugged off concerns about the potential impact of Brexit claiming Scotland’s strength in industries such as pensions and investment management mean it is well placed to benefit from trends that will have huge significance in coming years.

“Scotland has got a place which is very difficult to disrupt,” said Mr Grace, who stood down as chief executive of Edinburgh-based Aegon UK in January last year after running the pensions to investment technology group for a decade. He joined 7IM in September.

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Noting that Scotland is still renowned for the shrewd and prudent approach taken by firms in the finance sector, he said the country is home to a range of established businesses for which the outlook is good.

Besides Aegon UK, Mr Grace cited pensions specialists such as Standard Life, along with the Aberdeen Asset Management business it merged with, and the Baillie Gifford funds business.

“The reality is we have an ageing population and that ageing population is in dire need of the services that Bailie Gifford, Aberdeen Asset Management, Aegon UK provide and therefore I think all these businesses will continue to survive and thrive,” he said.

Mr Grace echoed the view of Barclays chief executive Jes Staley that it might make sense for firms that are active overseas to shift their focus onto Singapore or the US from markets such as France and Germany following Brexit.

He said it was vital that firms invested enough in ensuring that they responded to the impact of the coronavirus crisis. This has put the onus on companies to ensure they meet the resulting increased demand for online services, while offering value for money and the bespoke services that customers want.

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“People now need to focus on their online capabilities and make things easy for consumers and offer more value and at the same time offer that discrete personal service that many clients want,” noted Mr Grace.

Against that backdrop, he believes Scotland has the potential to become a leading player in the emerging financial technology sector.

The combination of the country’s financial services legacy and the strength of its technology base gives the country a real edge.

Mr Grace refocused Aegon UK on the market to provide technology platforms on which people can manage their investment portfolios. He decided this offered better prospects than the traditional pensions business.

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However, he warned Scotland could squander the opportunity unless more fintechs are encouraged to start up and better support is provided for those that exist.

Noting that the biggest challenges facing early-stage businesses are cash flow and customers, he said:

“If we’re going to create a future for Scotland it has to be around fintechs. That’s not to say the old industries will die but I think we could spend a lot more time creating the new world.”

Mr Grace chairs the Legado digital legacy business developed by his son Josif. The Edinburgh-based business has won backing from big guns such as Prudential and FNZ.

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The first months at 7IM have been enjoyable for Mr Grace, who reckons the business has the potential to grow significantly.

Based on current trends, he thinks 7IM could grow assets under management to above £20bn this year, from around £17bn.

Scotland is an important market for the business, which was founded as Seven Investment Management and has headquarters in London.

The company increased its presence in Scotland significantly through the acquisition of the Edinburgh-based TCAM asset management business in 2018. TCAM was spun out of law firm Turcan Connell in 2015.

7IM also has a technology centre in Leith. The company employs around 70 people in Scotland out of a group total of around 360.

Asked if more acquisitions could be on the menu for 7IM in Scotland Mr Grace said: “Absolutely.”

He added: “Distribution is important to us and we’ll clearly continue to look at distribution but if there are gaps in our product set that we need to fill then we’ll look at that.”

Fund management acquisitions would be less likely as 7IM has been happy with the performance of its own investment team.

However, Mr Grace predicted that asset management firms in Scotland would probably get swept up in the consolidation process that is working through the sector. He said the market is increasingly polarised between giants with the scale needed to compete in global markets against other big fish and boutique firms that offer specialist capabilities. Firms that get caught in the middle could face big challenges.

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Dutch-owned Aegon UK completed acquisitions under Mr Grace’s leadership, including the £140m purchase of the Cofunds platform business from Legal & General in 2016. Before joining Aegon UK, Mr Grace held senior roles at HBOS, Barclays, Sage and GE Capital.

The business created by the merger of Standard Life and Aberdeen Asset Management in 2017 decide to focus on asset management. The group sold the Standard Life pensions operation to Phoenix in 2018. It acquired an interest in Phoenix through the deal.