Bridgepoint To Snap Up Offshore Trust Giant

The booming demand for offshore trust and fund administration services will be underlined in the coming days by a $370m (£238m) takeover deal involving Bridgepoint, the London-based buyout firm.

Sky News has learnt that Bridgepoint has entered exclusive talks to buy a division of the Appleby Group, which calls itself one of the world’s largest providers of offshore legal, fiduciary and administration services.

The transaction, which insiders say could be completed as soon as this week, underlines the growing interest of private equity firms in tapping a relatively unexplored corner of the financial services industry.

News of Bridgepoint’s efforts to clinch a deal with Appleby Fiduciary and Administration also comes just days before George Osborne, the Chancellor, plans to announce a crackdown on what he has referred to as “aggressive tax planning” in his post-election Budget.

The Appleby unit which Bridgepoint is expected to acquire specialises in the creation of holding companies and special purpose vehicles, and is understood to count some of the world’s largest multinationals and wealthiest individuals among its clients.

A person familiar with the company pointed out that it did not offer the sort of tax planning services which Mr Osborne is expected to target this week.

The Chancellor is trying to force foreign multinationals to pay a higher proportion of the profit they generate in the UK in taxes, following a string of rows about the tax-planning activities of companies such as Amazon, Google and Starbucks.

A source close to the situation said that Carlyle, KKR and Vitruvian had also explored bids for the Appleby business, reinforcing the growing interest in owning such assets.

One of the attractions to Bridgepoint was the fact that Appleby represents a ‘primary’ deal, meaning an asset which has not previously been owned by private equity funds.

Demand for its work is being driven partly by an increase in regulatory oversight of trust and fund administration services, with Appleby Fiduciary and Administration operating from nine locations, including the Isle of Man and Bermuda.

Earlier this year, Vistra Group, which offers identical services to Appleby, was sold to Baring Private Equity Asia for an undisclosed sum, while last year, Electra Partners, a UK buyout firm, purchased the fiduciary services arm of the Jersey-based law firm Ogier.

Separately, Blackstone is preparing a flotation in Amsterdam of Intertrust, another significant player in the market.

Bridgepoint, whose most recent financial services deal was the lucrative sale of wealth manager Quilter Cheviot, declined to comment.