NatWest Group has acquired Evelyn Partners from Permira and Warburg Pincus for £2.7 billion, creating what it says is the UK’s leading private banking and wealth management business.
The deal combines Evelyn Partners’ £69 billion in assets under management with NatWest’s £59 billion, bringing total AUMA to £127 billion.
“Bringing together these two leading businesses creates a unique opportunity to provide financial planning, savings and investment services to more families and people across the UK. We look forward to welcoming our new clients and working with our colleagues at Evelyn Partners to transform the services our 20 million customers across the Group can expect from us,” said Paul Thwaite, Chief Executive of NatWest Group.
“At a time when the benefits of saving and investing are increasingly part of the national conversation, we can help customers to make more of their money through a broader range of services, as well as helping to drive growth and investment across the economy.”
NatWest successfully fought off interest from other parties to secure the deal. Barclays and RBC Brewin Dolphin were reportedly interested in acquiring Evelyn. And for good reason.
The acquisition transforms NatWest’s investment offering for its 20 million customers and increases fee income by approximately 20% before revenue synergies.
Evelyn Partners, operating for 180 years, offers an integrated wealth management model that includes financial planning, discretionary investment management, and the BestInvest platform.
NatWest expects annual cost synergies of around £100 million, equivalent to 10% of the combined cost base, with implementation costs of £150 million.
Alongside the acquisition, NatWest announced a £750 million share buyback, maintaining its track record of capital returns to shareholders. The ordinary dividend payout ratio of around 50% remains unchanged.
NatWest shares were 3% lower at the time of writing on Monday.