Investec considers sale of Rensburg division

Investec said it has received a number of expressions of interest in unit trust manger RFM, which employs five fund managers in Leeds.

RFM specialises in UK equities and has six unit trusts with about 800m under management as of the end of May.

RFM said it is "appropriate and timely to explore the full range of options" open to it. Investec has appointed Fenchurch Advisory Partners to "assess and test the appetite" for RFM – which could also see it retaining ownership of the business.

Alex Brotherston, joint chief executive of RFM, said a possible deal could result in the business moving from Leeds to London, but added current plans are a "blank sheet of paper".

Rensburg Sheppards recently ended more than 170 years of independence when Investec swallowed the rest of the company it did not own in an all-share deal worth 412m.

An outright takeover had been on the cards since Rensburg merged with Investec's wealth management firm Carr Sheppards Crosthwaite in 2005, a deal which gave the FTSE 100 company 47.7 per cent of the enlarged wealth manager. Investec gave 1.63 new shares for every Rensburg share and the deal completed late last month.

"What they (Investec) had was a couple of interested parties," said Mr Brotherston. "That got their minds thinking and it's appropriate to do a bit of a review as to how we fit in the bigger company."

He said the RFM team operates relatively autonomously within Rensburg, so a splitting from its parent would not be complex.

"We have a blank sheet of paper at the moment," said Mr Brotherston. "As a separate unit within Rensburg Sheppards it would be very easy for us to make the switch. We are a separate company with our own balance sheet and own employees.

"It's important that we have a strong team. The team work well together and are fully committed to the review."

No value was put on a potential deal, and RFM declined to say where interest has come from. Private equity-backed fund manager Jupiter Asset Management recently floated to raise 220m on the stock market, valuing it at around 755m. Jupiter had about 19.5bn of assets under management at the end of December.

While London and Edinburgh are the UK's fund management hubs, Mr Brotherston said the team would like to remain in Leeds.

"As a preference, of course, but it's a blank sheet of paper so we have to look at all the options," he said.

"It may be that the option of a London presence is more appropriate. But we are Leeds people so it would be nice if we could stay.

"Most of our business comes out of the south; it would probably be more logical for us to be out of the south."

Mr Brotherston said it will be "business as usual" while the review is underway.

"Importantly, the teams have backed the review from the outset and will be wholly involved in the process," he said. "We shall of course be giving full consideration to the best interests of all our stakeholders, including clients, advisers and employees."

Rensburg Sheppards has 11 offices throughout the UK, and more than 600 employees. Investec acquired it to bolster its asset management business. Leeds law firm Hammonds advised on the deal.

"There can be no certainty that this strategic review will result in a transaction or an offer being made for RFM," said Investec.

A name through the centuries

Rensburg Sheppards traces its roots back to the 19th Century's financial expansion.

It began in 1837, when stockbroker Stanley Battye & Co was founded in Huddersfield. Yorkshire stockbrokers William Wimpenny and Abraham Dawson opened firms in later years and Henry Rensburg started his stockbroking firm in Liverpool in 1873.

Battye, Wimpenny and Dawson merged to create BWD Securities in the 1970s. In 1988 the holding company floated on the London Stock Exchange. Soon after, BWD and Rensburg joined forces.

In 2004 the company changed its name from BWD Securities to Rensburg and in 2005 merged with Investec's Carr Sheppards Crosthwaite, to create Rensburg Shepp-ards.

Investec bought the 52 per cent of Rensburg Sheppards it did not own in June in an all-share deal worth 412m.