Stockbroker Davy has finalised a deal to take over Prescient Asset Management Holdings (Ireland), the former AIB Investment Managers business. The price was not disclosed but is thought to be close to the estimated €6.5 million Prescient paid when it took over AIBIM less than two years ago.
Prescient in Ireland is believed to have some €2 billion under management, and should thus boost Davy's managed assets by about a fifth. The transaction requires the approval of the Central Bank.
"Davy is very pleased, as an Irish firm, to have the opportunity to acquire a quality business that has been servicing the investment needs of clients since 1966," said the broker's chief executive Stephen Garry. The deal marks Davy's second acquisition in 18 months, following the integration of Bloxham's asset management business last year.
Prescient chief executive Herman Steyn said the South African company had decided to focus on its Irish-domiciled funds business, which pre-existed the company’s takeover of AIBIM in mid-2012.
At least some of the company’s 57 Irish-based employees are likely to face redundancy as Davy seeks to avoid doubling of resources.
The Prescient offices at Percy Place in Dublin are expected to be vacated as Davy fills additional space it has taken on Dublin’s Dawson Street over the past 18 months. The broker, which was the subject of a management buy-out some seven years ago, has recently added 100 staff.
Institutional clients
The company changing hands is believed to have about 60 per cent of its business with institutional clients, which typically provide lower margins but more substantial assets.
Davy is thought to have been particularly interested in Prescient’s private client and charity mandates.
Prescient did not thrive in Ireland after the AIBIM takeover, with the outflow of a mandate to manage AIB’s pension fund a particular blow to the company’s expansion plans.
Brian McKiernan, head of private clients at Davy, said last night that more consolidation is “inevitable” in the sector, with the broker ready to embrace that.
“We have set out our stall as a consolidator,” he said.
Davy is reported to be in the process of negotiating a refinancing of loans it held with now-liquidated IBRC.
