15,000-strong list believed to have cost the country's largest broker between €10m and €12m
EMBATTLED Bloxham Stockbrokers will sell its €540m private client business to Davy Stockbrokers this May to focus on institutional investing.
Davy is believed to be paying somewhere between €10m and €12m for Bloxham's 15,000 private clients, although neither side would comment publicly. The business had revenues of around €6.5m last year.
Bloxham's clients must now move their accounts to Davy or another broker, but they will not be able to stay with as Bloxham, which is exiting the business. There will be no job losses.
Bloxham is Ireland's oldest independent stockbroker but it struggled recently as revenues fell and disgruntled clients took legal actions against the firm.
Bloxham has sued an insurance firm for more than €20m over a bond that collapsed in value, but the stockbroker is also facing action from clients who lost money on the deal.
"Following a strategic review of our business, we have decided to focus on our asset management, institutional bond and institutional equity businesses," Bloxham managing partner Pramit Ghose said.
"We have been highly selective in choosing a firm that has the requisite financial and regulatory resources and infrastructure to meet the evolving needs of clients in the years ahead."
Bloxham belongs to eight partners and FBD Insurance, which is a limited partner and has an 11.5pc stake in the broker. Partner Paddy Finnegan heads the private client business.
Davy, which manages a private client business around 10 times bigger than Bloxham's, has been improving its back office operations to take account of new regulations and changing the focus of analyst research to follow more companies outside Ireland.
The country's largest broker also opened an office in London recently.
Ireland's small stockbroking industry has been thrown into chaos as the financial crisis has laid waste to many clients' savings and investments. Goodbody and NCB stockbrokers have changed hands recently, while others have trimmed staff numbers.
The 27 people working in Bloxham's private clients' business in Dublin, Cork and Limerick will join the 420 staff working at Davy's offices in Dublin and Cork. Davy will probably lease Bloxham's Limerick office.
"This deal is good for Bloxham clients and is good for the long-term viability of the Irish stockbroking market," said John Sheridan of Key Capital, which acted as advisers to Bloxham on the sale.
"Critically, this agreement ensures that key stockbroking skills are retained within Ireland and under Irish ownership," he added.
Bloxham cut some 8pc of its staff late last year as the slowdown in business finally began to bite. The broker let go four back-office staff, believed to have been involved on the institutional equities side of the business, and three IT contractors.
Key Capital acted for Bloxham while Davy used its own managers.