RFM's name may disappear after sale

THE name of Rensburg Fund Management could eventually disappear after owner Investec agreed to sell the Yorkshire business to an American investment house for £45m ($71.5m).

The long-term future of RFM joint chief executive Alex Brotherston also appears uncertain after completion of the deal, which will give Franklin Templeton a stronger foothold in UK equities investment management.

The all-cash deal, which is expected to complete early next year, had been on the cards since July, when South African banking giant Investec said it could sell RFM after buying parent wealth manager Rensburg Sheppards.

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Yesterday Jamie Hammond, European managing director of Franklin Templeton, said RFM's Leeds-based team of six investment managers would be retained but was non-committal on the future of its name.

"We will continue to use the brand during the transition. In time it may make sense to turn it to the other Franklin Templeton name."

He hailed RFM's "very strong track record and reputation" but when asked about the future of Mr Brotherstone, who currently remains in the post, he said: "There is a lot of work to be done to ensure the smooth integration of the business and then (we will) look at the structures."

The deal, which has to be approved by City regulators, will give Templeton improved access to British investors keen on managers with local knowledge. Mr Hammond said the acquisition was a chance to grow its funds under management but refused to comment on suggestions it had more deals in the pipeline.

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Greg Johnson, chief executive of Franklin Resources, which operates as Franklin Templeton Investments, owns Franklin Templeton Global Investors (UK), said: "This acquisition makes strategic sense for us and fits very well with our overall corporate strategy of building the best investment products in markets such as the UK, where local asset management expertise is important to meet local investors' needs."

Rensburg had 880m in assets under management at the beginning of November, including equity investments in small and mid-caps as well as blue chips.

Franklin Templeton has 100 staff in London and 200 in Edinburgh, the UK's two fund management hubs. It runs one UK equity fund from Toronto, which is managed by Martin Cobb. The Templeton UK Equity fund returned an estimated 2.1 per cent in the year to October 31, underperforming peers by 12.4 percentage points according to Lipper Global data.

RFM has been managing investments since 1985 and specialises in UK equities. Its parent company, Rensburg Shepphards, is one of the North's major stockbrokers and 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.

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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 in June.

It is not known how many bidders there were for the sale of RFM. Rensburg Sheppards were advised by lawyers from Hammonds in Leeds.

n Investec, South Africa's fifth-largest bank, yesterday posted a near 6 per cent rise in its half-year operating profit to 228.15m, helped by growth in the asset management business.

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