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Rathbone buys Laurence Keen

Rathbone Brothers, the 253-year-old private banking and investment services company, has expanded its stockbroking business with the purchase of Laurence Keen, the City-based private client stockbroker.

In a deal worth about £10m, Rathbones has increased its funds under management by £1.1bn to £2.5bn and added two small unit trusts to its portfolio of three.

"The two business fit together beautifully and we welcome the chance to expand our client base," said Micky Ingall, chief executive of Rathbones.

Originally established to manage the personal fortune of the Liverpudlian Rathbone family, which made its fortune in timber and ships, Rathbones has moved aggressively into the management of private client money since the merger with Combined Financial Services in 1988.

Profits have increased from £1.51m on a turnover of £4.74m in 1985 to £5.2m on a turnover of £17.6m in 1993 as the company acquired other businesses. These included unit trusts from Brown Shipley in 1993 and Hilbre Investment Management in 1992 and brought the total number of clients to 6,000.

Rathbones believes the introduction of five-day rolling settlement later this year and the introduction of the stock exchange's Crest share-dealing system in 1996 will increase the demand for private stockbroking services.

Laurence Keen, itself nearly 200 years old demerged from Laurence Prust in 1986. it has built up a portfolio of 10,000 client accounts and employs 82 staff. Last year it made a pre-tax profit of £1.3m on a turnover of £9.48m.

The deal is seen as an indication of further consolidation in the private investment management industry. Private stockbrokers have found it increasingly uneconomic to deal in shares more cheaply than large share shops and building societies. Clients meanwhile have sought a wider range of advice.