Charles Stanley has agreed a deal to buy Evercore Pan Asset Capital Management, the passive portfolio specialist co-founded by John Redwood MP.
The deal will see Charles Stanley acquire the entire share capital of Evercore Pan Asset, buying the founders' stakes as well as the 68% shareholding owned by US-based Evercore Partners, the boutique investment firm.
Charles Stanley will pay an initial, undisclosed fee for the business, before making further payments based on Pan Asset's overall performance over the next 12-18 months.
Both Redwood (pictured) - who is chairman of the group's investment committee - and chief executive Christopher Aldous will move over to Charles Stanley following the takeover.
The wealth manager is buying the passive investment house in a move to enhance its passive funds offering and model portfolio services for IFAs.
Evercore, which was founded in 2007, has grown its AUM to £593m as of 31 October this year.
However, despite growing assets, the company has struggled to make a profit since launching.
According to its latest financial update, the business made a pre-tax loss of £340,131 in 2012, following on from a £520,804 loss in 2011.
Charles Stanley said Evercore has been operating near the break-even point, adding a number of cost-savings resulting from the takeover would make it "immediately profitable."
Charles Stanley itself reported a 44% increase in H1 pre-tax profit to £4.9m earlier today. Those figures prompted a 9% rise in its share price at the open this morning.
Mike Lilwall, director of Charles Stanley, said: "The acquisition of Pan Asset will complement the company's existing distribution channels by broadening Charles Stanley's expertise and product offering into the area of passive, and in particular we foresee opportunities to enhance our increasing offering to the financial adviser marketplace."
While contracts have been exchanged, the takeover is subject to FCA approval.
Cautious, Balanced & Dynamic Growth
Cowardly, boring or sensible
Latest news and analysis
‘Most significant’ upgrade since launch
Changes happening over coming months