Close Brothers Group has agreed to sell its wealth management business, Close Brothers Asset Management (CBAM), to funds managed by Oaktree Capital Management for an equity value of up to £200m.

The total, which includes £28m of contingent deferred consideration in the form of preference shares, is a multiple 27 times of CBAM’s statutory operating profit after tax for the 2024 financial year.

Close Brothers intends to retain all upfront cash proceeds from the transaction of approximately £172m. The firm said that the deal will strengthen its capital base and improve its position to “navigate the current uncertain environment”.

“The transaction is expected to increase the group’s common equity tier one capital ratio by approximately 100 basis points, marking significant progress towards the plan we outlined in March 2024 to strengthen our capital base,” Close Brothers chairman, Mike Biggs, commented.

“The board has unanimously approved the transaction and believes that the agreed sale represents competitive value for our shareholders, allowing us to simplify the group and focus on our core lending business. CBAM has delivered impressive growth over the past years and has developed into a strong franchise.”

Oaktree managing director, Federico Alvarez-Demalde, commented: “We are delighted that Close Brothers chose to partner with us on this important transaction. We have observed CBAM's progress over several years and hold the franchise in high regard.

“In the coming months we will bring to bear our extensive operational experience in the sector to work closely with Close Brothers and ensure a successful separation and transition of the business.”

Close Brothers expects the transaction complete in early 2025 calendar year and said it remains conditional upon receiving regulatory approval.

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