Italy’s Mediobanca has recently signed an agreement to buy RBS’ Cairn Capital Group, the London based, credit asset management and advisory firm of the Scottish group.
Cairn Capital was established in 2004 and provides a full range of credit asset management and advisory services, with a particular focus on European credit.
As at 30 June 2015, Cairn Capital had $5.6bn (€5bn) of discretionary and legacy assets under management, with a further $9.1bn (€8.2bn) of assets under long term advice.
Under the terms of the transaction, Mediobanca will acquire 51% of the share capital of Cairn Capital on completion.
Mediobanca will have the ability to increase its interest in Cairn Capital after three years with an option to acquire some or all of the remaining 49%, the majority of which is held by the management and staff of Cairn Capital.
As part of the transaction, Mediobanca will be providing Cairn Capital with seed capital, enabling the launch of new investment strategies which will ensure that the firm remains at the forefront of product innovation.
Cairn Capital management will continue to be responsible for day-to-day operations and retain full autonomy over its investment processes.
Paul Campbell will continue to be CEO of the company and has agreed, together with the rest of Cairn Capital’s management team, to enter into new, longer term contracts in conjunction with the transaction, ensuring continued strength and stability to the business.
The transaction value does not have a material impact on CET1 of Mediobanca Group.
The transaction is subject to customary conditions, including approval from the relevant regulatory authorities, and is expected to close before the year end.
“As part of its overall strategy, Mediobanca is strongly committed to the development of an international Alternative Asset Management business, achieved through strategic partnerships with selected asset managers, having strong track records, high quality management teams, and scalable platforms.
“Cairn Capital will fulfill a central role within the MAAM credit platform and is well positioned to benefit from Mediobanca’s distribution channels, network of investor relationships and market access, as well as its institutional infrastructure and support,” the Italian bank’s statement read.