Blue Sky Asset Management has agreed to a takeover by US investment bank Incapital, in a move to expand its structured product offering.
The deal will see Blue Sky merged into the structured product specialist's London-based subsidiary, Incapital Europe.
All of Blue Sky's previous book of plans will be transferred over to Incapital and will have ongoing service to maturity and beyond.
Investors' contracts are unaffected by the change and Incapital will take on the responsibility to provide services to IFAs. Advisers and investors will also be able to deal with familiar Blue Sky staff and systems.
Any Plan currently in ‘open offer' will continue as a Blue Sky plan, until shortly after their strike dates, when the responsibility to IFAs for providing ongoing services will transfer to Incapital.
Blue Sky chief executive Chris Taylor says the company decided to look for a partner after a strategic review last year, following the collapse of Lehman Brothers and the demise of firms such as NDFA and Arc Capital & Income.
He believes independent structured providers will not survive unless they have stronger financial backing.
"We recognised that like most other independent structured product providers we were a boutique," he says.
"What the events of the last few years have shown is structured product providers are no longer in control of their own destiny.
"All it will take is for a change by the regulator or another knock to the financial system for providers to get into trouble because of a lack of capital.
"We knew we needed a partner with capital and backing and we are delighted to be merging with Incapital."
Along with other Blue Sky owners James Chu and Mark Dickson, Taylor will become joint managing director of the new company.
As well as creating a stronger financial position, Taylor says the tie-up will also improve the firm's distribution capabilities.
The company plans to expand its dealings with national and network adviser firms and is looking to build a business development team over the summer to develop this strategy, he says.
It will also provide advisers with access to a wider range of counterparties through Incapital's existing relationships with major banks, he adds.
Incapital is the largest independent distributor of structured products in the US. Since 2000, securities worth $200bn have been issued through retail note programmes.
For more details visit the new website at: www.IncapitalEurope.com.
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