Evolution lands wealth manager deal as Investec waits in wings

Evolution Securities has agreed to buy BNP Paribas' private client investment unit as it gears up to fend off a takeover approach of its own.

The acquisition of BNP ParibasPrivate Investment Management (PIM) was carried out by the British broker's private client investment management subsidiary, Williams de Broë, in a deal worth £25m. The chief executive, Alex Snow, said the two companies had a "strong cultural overlap, investment process and style".

Last week, Evolution became a target itself when the South African broker Investec tabled a bid for the company. Henry Biddle, an analyst at Peel Hunt, said the bid could be worth as much as £250m.

Neither side would comment on the negotiations, though it is understood that yesterday's deal will not change anything, and was already priced into Investec's approach.

Evolution revealed two weeks ago that it was in exclusive talks with BNP, and the deal was completed on Friday night. Evolution hopes that PIM will be fully merged into Williams de Broë by the end of the year, subject to regulatory clearance.

PIM will bring with it the private client investment management business, which is based in the City of London, just across the street from Evolution's offices. It also has a derivatives business and a US brokerage.

Last year, PIM generated £14.1m in revenues but fell to a loss of £8.8m. Mr Biddle said yesterday: "Williams de Broë has historically been able to pick up distressed or loss-making portfolios at reasonable prices and successfully integrate them on to the platform and within the brand."

PIM brings with it £1.8bn of assets under management, moving Williams de Broë to £7.8bn. Its executives aim to have £10bn of assets under management by the end of 2012, compared with £800,000 in 2005, as they aggressively expand the company through acquisitions and organic growth.

Evolution bought Williams de Broë in June 2006 from Williams de Broë Holdings and ING. Two years later, it bought Singer & Friedlander Investment Management. Mr Snow said the PIM deal showed the company's "continued ability to successfully execute and integrate" acquisitions into its structure.

It is believed that Investec has approached Evolution primarily to get its hands on Williams de Broë and would be likely to split up the group if it is successful. Its own private clients division has assets worth £30bn.

Last month, Williams de Broë announced that its half-year profits had improved to £5.5m from £5.1m a year earlier. The company said funds had grown "significantly" and pointed to its investment in infrastructure, its systems and the strength of the Williams de Broë brand.