RBS sells majority stake in Cairn Capital to Mediobanca as downsizing continues
The deal includes the provision for the Italian bank to acquire the remaining 49pc of the Knightsbridge-based asset manager in three years’ time.
Cairn has $5.6bn of assets under management and $9.1bn of assets under long-term advice.
Mediobanca said the purchase would help it offer more services to its existing customers, as well as enable it to access Cairn’s investor base.
It was also announced that Cairn’s chief executive Paul Campbell is staying at the firm and has been given a new, longer-term contract.
The move by RBS is in line with its strategy to pull out of businesses like Cairn as it tries to return to sustainable profits.
RBS was instrumental in establishing Cairn Capital back in 2004, when the asset management and advisory firm was set up by a group of investment bankers backed by RBS and Star Capital Partners.
Since then, RBS has re-focused on retail and business banking, as the business is re-shaped in the wake of the financial crisis.
A key landmark in that process was reached this week when the government sold its first stake in the bank, offloading shares amounting to 5.4pc of the bank in a £2.1bn sale.
Alberto Nagel, CEO of Mediobanca said: “This transaction confirms our strategic focus on building a leading asset management business with attractive earnings and high return on capital to further develop the international footprint of Mediobanca.
“Cairn Capital is an excellent company with an outstanding management team and will be a highly complementary fit with Mediobanca’s alternative asset management platform. We view credit as a very appealing asset class and see multiple synergies across the two organisations, including our corporate and investment banking business. Cairn Capital’s expertise across the entire credit spectrum will enable us to offer our clients valuable long-term advice and investment products.”
The acquisition came as Mediobanca announced its revenues increased by 12pc in the financial year ending in June, coming in at over €2bn for the first time ever. Its profits rose 27pc on the year to €590m, allowing the bank to increase its dividend by 67pc to €0.25 per share.