Geoff Percival and Eamon Quinn
US investment firm Cantor Fitzgerald Ireland has struck an agreement to buy Merrion Capital, the broker with offices in Dublin and Cork. The deal, which is subject to Central Bank approval, comes after Irish brokers have faced continuing tough markets since the banking and property crash, despite the strong recovery of recent years.
Merrion said that the deal would make it better placed in the long-term to serve its private, institutional, and corporate clients by being part of a larger international group given the growing trend of consolidation in the financial services industry. Most of Merrion’s 80 staff are based in Dublin, who hold small shareholdings in the firm. Merrion’s staff were told of the closing of the deal late yesterday.
The combined firm may be able to more closely compete with Davy and Goodbody. Its two main external shareholders are Bermuda-based financial services company Somers and property investment group Tetrarch Capital. Merrion chief executive Pat O’Neill said Cantor, which acquired Dolmen Stockbrokers in 2012, was ideally positioned to meet Merrion’s growth needs, “given its similar values, broad product range and global reach in research”.
“The values, strategies and approaches of both firms are similar, and the transaction will undoubtedly prove beneficial to both firms and their clients,” Mr O’Neill said.
“Ensuring continuity of the Merrion team, strategy and our client-focused philosophy was an important factor in our decision to join Cantor and will help us build scale and deepen our product offering for existing clients in all areas of our business,” he said.
Cantor chief executive Ronan Reid said the addition of Merrion’s wealth management, debt, and corporate finance teams, as well as its investment management division, “will create one of the largest financial services firms in Ireland, while retaining both firms’ client-centric offering and approach.”
“Merrion ranks as one of Ireland’s leading independent providers of financial services, with origins and values similar to Cantor’s business,” Mr Reid said.
Even before the crash Irish brokers were facing a downturn in profits generated from trading in Irish shares.
In recent years, the costs of compliance and regulation have grown significantly.