Update: Winterflood, the investment company broker and market maker, has been sold to Marex, a US Nasdaq-listed commodoties trading platform, for £103.9m cash.
Although not well known in the UK, market observers had spotted Marex’s potential interest in the inevestment trust sector, given Angelo Sofocleous, a former Cantor Fitgerald boss, has worked for the company in the UK for three years as head of corporate advisory.
Before he ran Cantor Fitzgerald’s European business for four years until 2020, Sofocleous headed up UK equities and investment trusts at the business for three years. Prior to that he oversaw the investment trust teams at Canaccord Genuity and Panmure Gordon, according to his LinkedIn page.
Close Brothers Group (CBG), the £650m UK merchant bank, announced the disposal of Winterflood on Friday in the latest move to streamline its business ahead of a Supreme Court ruling on Friday that will decide how much it needs to compensate consumers in the scandal over motor finance commissions.
Mike Morgan, Close Brothers chief executive, said Marex would make “an excellent steward” for Winterflood and thanked the team for their hard work.
Marex chief executive Ian Lowitt said the acquisition would transform its equities market making business. “We believe we can gain economies from operating at scale and also benefit from Winterflood’s great technology and strong client relationships which will enable us to introduce additional products and services from across our platform to a new set of clients.”
With a market value of $2.7bn (£2bn), Marex employs 2,400 employees at over 40 offices around the world. In 2024 it reported a 51% rise in profits before tax to $295.8m.
Close Brothers said it would take a goodwill impairment loss of £15m on the sale given Winterflood’s tangible net asset value of £88.9m. Winterflood made an operating profit of £3.5m in 2023 before falling into a loss of £1.7m in 2024 and £800,000 in the first half of this year.
The transaction is expected to lift Close Brothers’ tier one capital ratio by 30 basis points, or 0.3%, to 14.3% when it completes next year.
In a message to clients, Emma Bird, head of investment trusts research, said: “We are excited about the benefits of being backed by a large, growing company.”
