Edinburgh wealth management firm founded 21 years ago acquired in seven-figure deal

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An Edinburgh-based wealth management business founded 21 years ago has been acquired in a seven-figure deal.

© Caledonia Asset Management is based in Edinburgh and employs an experienced team of five staff, all …

The takeover of Caledonia Asset Management by Mattioli Woods follows a wave of consolidation in the sector including the recent acquisitions of Adam & Co, from Royal Bank of Scotland, and Cornerstone Asset Management, which was bought by Waverton Investment Management Group.

Mattioli Woods, the specialist wealth and asset management business quoted on London’s Alternative Investment Market (Aim), is acquiring Caledonia Asset Management from its shareholders for an initial £960,000 and potential further consideration of up to £640,000 dependent on meeting performance targets in the two years after completion of the deal.

Founded in 2000, Caledonia provides wealth management services to affluent individuals and families, covering areas such as lifestyle financial planning, pensions and retirement planning, income protection and personal taxation matters.

The firm works with about 150 private clients with more than £55 million of assets under advice. Its team of five staff will remain with Mattioli Woods following completion.

Gordon Forbes and Pauline Forbes, Caledonia’s directors, said: “This is a very positive step for everyone associated with Caledonia, especially our clients and employees. Mattioli Woods shares our core values and client centred business ethos and so we are delighted to become part of the Mattioli Woods Group.

“Combining our strengths will allow Caledonia’s clients and employees to benefit from the considerable additional resources and support available as part of the group, enabling our team to enhance and expand the bespoke personal service our clients expect from us. We are very much looking forward to this exciting new phase.”

Ian Mattioli, chief executive of Mattioli Woods, said: “Caledonia is a great fit for us both culturally and operationally, serving a similar client base to that of our existing business. This is an important strategic step for the group, extending the geographic footprint of our wealth management business in Edinburgh.”

In 2020, Caledonia generated revenues of £450,000 with a profit before taxation of £180,000. The acquisition is expected to be earnings enhancing in the first full year of ownership.

Paul McGinnis, an analyst as brokerage Shore Capital, said: “The MW [Mattioli Woods] management team has a strong track record of value creation through deals and we expect further purchases, including potentially larger businesses, on an ongoing basis.”

Last week it emerged that Canaccord Genuity Group was buying Adam & Co for £54 million following months of speculation surrounding the RBS-owned wealth manager.

Adam & Co’s Edinburgh-based investment management business has client assets amounting to some £1.7 billion.

News of the sale followed speculation regarding a potential disposal as RBS parent NatWest Group focuses on its core UK banking operations.

The deal came hot on the heels of Cornerstone Asset Management, which has offices in Edinburgh and Glasgow and advises on some £500m of assets under management, being bought by London-based Waverton Investment Management Group.

Waverton said the acquisition represented an expansion of its regional footprint and would allow for an “augmented service proposition”, bringing together wealth planning and discretionary investment management services for clients.

READ MORE: Wealth planning firm with Edinburgh and Glasgow offices and 1,000 clients bought by English peer

READ MORE: RBS agrees deal to sell Edinburgh-based £1.7bn wealth manager Adam & Co

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