Raymond James announced plans Thursday morning to acquire Charles Stanley, a 200-year-old wealth management firm in London, with about 200 wealth managers and about $37.9 billion in client assets. The firm has agreed to pay $387 million for Charles Stanley, a publicly traded company on the London Stock Exchange.
On an earnings call with analysts Thursday morning, Raymond James CEO Paul Reilly said the acquisition puts his firm in a more competitive position in the U.K., where the firm currently has about 300 wealth managers and about $20 billion in client assets.
“When we find these rare opportunities to acquire a 200-year-old firm that has a great brand and name and matches our culture, we’re going to act,” Reilly said.
“The combination would provide Raymond James with the opportunity to accelerate growth in the U.K., the second-largest English-speaking wealth management market; and, through Charles Stanley’s multiple affiliation options, will give Raymond James the ability to offer wealth managers affiliation choices consistent with its model in Canada and the U.S.,” the company said in a statement.
The deal, expected to close in the fourth quarter 2021, would also expand Raymond James’ employee affiliation model in the U.K., which the firm recently launched. Both Raymond James and Charles Stanley have employee and independent contractor affiliation models.
Paul Shoukry, chief financial officer and treasurer at Raymond James, said the firm plans to fund the acquisition with cash on hand.
Charles Stanley will remain separately branded, as Charles Stanley, a Division of Raymond James. The firm will maintain its existing offices, including its London headquarters. Charles Stanley’s current chairman, Sir David Howard, will continue to serve as chairman, and CEO and Chief Financial Officer Paul Abberley and Ben Money-Coutts, respectively, will stay on in those roles. Peter Moores, CEO of Raymond James U.K., will be responsible for both U.K. businesses.
Separately, Raymond James announced its fiscal third quarter earnings on Wednesday, with record quarterly net revenues of $2.47 billion, up 35% year over year and 4% sequentially. The firm’s quarterly net income was $307 million, or $2.18 per share, up 78% year over year but down 14% from the prior quarter.
The firm has added 86 advisors since March, bringing its total head count to 8,413, up 258 from a year ago.
The firm also reached a new record for client assets under administration in the private client group, at $1.1 trillion, up 32% year over year and 7% sequentially.
The firm attributed the growth to market appreciation and the net addition of advisors.
“Recruiting activity remains strong across all of our affiliation options, as advisors are attracted to our robust platform and our advisor- and client-focused culture,” Reilly said, in a statement.