Guy McGlashan and Nick Tucker
UK-based wealth management companies Waverton and London & Capital are set to merge.
This move, which is subject to regulatory approval, is designed to create a robust wealth management business with services that complement each other, Nick Tucker, chief executive of Waverton, and Guy McGlashan, chief executive of London & Capital, told thewealthnet.
“It genuinely is a merger of two great and growing businesses,” Mr McGlashan stressed.
The combined business will have assets under management (AUM) of over £17 billion.
London & Capital’s international advice – particularly focused on the US resident and expat communities – and wealth planning offering should blend well with Waverton’s investment performance and wealth solutions, which have been recognised at the PAM Awards. The firm won the Investment Performance: Cautious Portfolios and Client Service Quality Awards at the 2023 event.
Meanwhile, Mr Tucker said London & Capital’s ultra and high net worth planning offering will “really complement” Waverton’s approach to its UHNW clients and allow it to offer an extra service to clients.
Following the merger, Mr McGlashan will become chief executive of the combined entity, with Mr Tucker taking a position on the board.
It was always Mr Tucker’s plan to retire this year, after promising his family he would step down when he turned 60. However, he will still stay connected to the business and industry through his role on the board and other projects he is considering.
He is pleased with the succession planning too, stressing that if there had been a simple search for a replacement, rather than a merger, “Guy would have been top of the list”.
This is not surprising looking at Mr McGlashan’s CV. Having been at London & Capital since 2015, he was originally chief operating officer (COO) before being appointed chief executive in 2019. Before this, he was COO of the private office at Coutts, and was a managing director at Kleinwort Benson – now SG Kleinwort Hambros – before that.
The merger has been in the works for a long time, with Mr Tucker dating the initial decision to look for a partner back to the summer of 2022. At this point Waverton was 2.5 years into its five-year growth plan and was ahead of target, which the firm felt proved it was a growth business.
At a strategy day, the management group wanted to establish how this growth could be accelerated and decided: “Let’s challenge ourselves”.
However, the challenge came in doing this, “all without jeopardising what makes Waverton special”, Mr Tucker explained.
Various firms made approaches, but were not quite the right fit. And then, Mr Tucker and Mr McGlashan started speaking, having known each other for a while before.
As these conversations developed, the pair realised the culture of the two firms was very similar and the strengths complemented each other.
Indeed, there is significant alignment in the firms’ core values. At Waverton, these are: excellence; partnership; and stewardship, while at London & Capital they are: excellence; partnership; family; and integrity.
Despite this, Mr McGlashan admitted “we were hesitant at first”. The firm had only recently closed its deal with US private equity backer Lovell Minnick Partners (LMP), following the sudden passing of London & Capital’s co-founder and managing director Daniel Freedman in 2019.
However, as the conversations progressed, the alignment was clear and the firms realised they had a shared vision: “great clients make great businesses”.
In the summer of 2023, the conversations escalated and the firms established how a merger could work and introduced both management teams to ensure they all got on well together.
The actual merger is “really complex”, Mr Tucker acknowledged, but said the two firms’ ability to have open conversations and manage any difficulties demonstrates how good a fit the firms are.
Moreover, both firms’ backers are supportive of the deal.
This gave the firms confidence that they were onto a good idea. If “very smart and very successful investors came to the same conclusion as us”, then it gives extra weight to the decision to merge.
Mr Tucker “had assumed Somers [Waverton's backer] would leave” as the deal would offer the firm an exit, but the firm instead has demonstrated its support and chosen to stay on, even without a dividend pay-out.
Going forward, the ownership structure will be: 30 percent staff; 19 percent Somers; and 51 percent LMP.
Having staff as shareholders is important to both firms, and it is also important that it is not just senior executives that reap this benefit. Rather, it is seen as a way of empowering and incentivising younger, dedicated staff that will hopefully become the future leaders of the business.
Staff will not lose out in the merger either. The 70/30 ownership split is similar to the split at Waverton in 2013.
The reciprocal nature of employees’ respect was demonstrated in both firms telling all staff about the deal two weeks ago.
“People really respected that we trust them,” Mr Tucker said.
Indeed, the news was well-received by employees on both sides. Of course, there are some concerns about the future of their jobs. However, being so growth-focused, the hope is that new job opportunities will be created through the deal.
“This is categorically not about cost cutting,” Mr Tucker stressed. Rather all parties want to “create an enduring, sustainable business”.
Supporting this view, Mr McGlashan noted: “It would be easy to say this is just another PE roll up, but it really isn’t”. It is much more about creating a successful, long-lasting wealth management business, which they hope will create what will “become the new normal for wealth management”.
By this, Mr McGlashan was referring to offering proper, personalised service – which is demonstrated by all clients being contacted by phone today to tell them about the merger – and being committed to high quality performance rather than “benchmark hugging”.
There are no ambitions to be the biggest, but an acknowledgement that a certain size can help navigate the current wealth management market successfully.
The aim is simple, Mr Tucker concluded, to be “big enough to deliver, but small enough to care”.
