RBS to sell asset manager arm
ROYAL Bank of Scotland is preparing to put its asset management business up for sale, including assets that are accessible to clients of Coutts, the private bank that is best known as an advisor to the Queen.
A sale of RBS asset management, which creates hedge funds and private equity funds-of-funds using third-party managers, could fetch the struggling bank – which is 70 per cent state owned – around £100m.
At the end of 2008, the asset management division was advising clients on assets worth around £30.6bn, with the vast majority of those being managed on behalf of Coutts customers.
The decision to sell the asset management arm fits in with new chief executive Stephen Hester’s strategy of disposing of non-core assets in a bid to nurse the bank back to profitability. Earlier this month, the firm sold its Pakistani arm to MCB.
Seven Investment Management strategist Justin Urquhart-Stewart said: “This is the worst time to offload an asset management business. It’s a buyer’s market, not a seller’s market.”
He added: “A buyer could pick off parts of the business for a good price, but there is a level of disenchantment surrounding asset management.”
Coutts is also currently in a high-profile battle with clients over its investments in ailing AIG, meaning a buyer would also have to take on that issue.
Urquhart-Stewart said: “Coutt’s used to have an attractive level of cachet as the Queen’s banker – but it has been devalued to a glorified middle class bank with a gilt-edged cheque book and a lost reputation.”
RBS last night declined to comment.