Apax carves out S&W accountants from Evelyn wealth managers

Apax Global Alpha contributes £23.4m of a reported £700m price tag for Smith & Williamson, the accountancy arm spinning off from Evelyn Partners.

Private equity firm Apax has struck a deal to buy the accountancy arm of wealth manager Evelyn Partners’ for a reported £700m with its London-listed investment trust Apax Global Alpha (APAX ) contributing £23.4m (€28m). 

Evelyn confirmed the sale on Monday following reports over the weekend, but did not disclose how much Apax had paid for its professional services division. 

Today APAX, a £694m investment company that invests in Apax funds, said the purchase had been made by Apax XI, the group’s latest fund which announced in March it had raised a total of £9.5bn ($12bn) from investors. 

The company, which Citywire described as a ‘hidden gem’ in October, expects to invest £23.4m, or 2.2% of net assets, out of the $700m (£555m) funding commitment it made to Apax XI two years ago. In common with many listed private equity funds, its shares trail on a wide 33% discount to net asset value. 

The S&W transaction, which is subject to regulatory approval, is expected to complete in the first quarter of 2025 and will see the Smith & Williamson brand revived five years after the old S&W busimess was sold for £625m to wealth manager Tilney, renaming as Evelyn Partners in 2022. 

A spokesperson for Evelyn said that the S&W name is one that will ‘quickly resonate with clients’ and can be ‘brought back to life at speed’. 

The deal will see Andrew Wilkes, chief professional services director at Evelyn Partners, become chief executive of S&W. Andrew Baddeley, group chief financial officer of Evelyn Partners, will take up the role of CFO of S&W.

Apax said it had identified the mid-market accountancy and advisory space as the ideal place to invest as increased regulation and conflicts made the ‘Big Four’ firms less competitive. There were also opportunities to improve its client proposition, invest in technology and unlock value through strategic acquisitions in what was a fragmented market.

Frank Ehmer, partner at Apax, said: ‘We have been tracking the accountancy and advisory space for a number of years and prioritised S&W as the ideal UK platform to invest behind. Throughout our engagement, it became immediately clear to us that S&W is a true market-leading player in the mid-market segment and holds an unrivalled heritage and reputation from which the business can look to scale new heights.’

Founded in Glasgow in 1881, S&W has about 1,600 employees and more than 121 partners operating from 15 offices across the UK, Ireland and the Channel Islands. Its services include private client tax advice, assurance and business services and advisory and digital services that include recovery and restructuring, forensic services, and transactions.

Paul Geddes, Evelyn Partners CEO, said it is the right moment to ‘sharpen [our] focus further by creating two strong standalone businesses’.

Wilkes said the relationship with Evelyn Partners ‘will be an enduring one as [we] continue to provide a joined-up service for shared clients’.

Last year, Citywire reported that the integration of Tilney and Smith & Williamson (S&W) had caused some culture problems in the business. In a subsequent interview, the firm’s investment head Chris Kenny stressed they did not simply ‘smash everything together’ following the merger. 

Evelyn Partners was advised by Evercore and Macfarlanes and Apax by Jefferies and Nomura.