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Frenkel Topping seeks buyers as Ogden rate change seen boosting AUM

Manchester, U.K.-based Frenkel Topping Group Plc on April 3 announced a formal sale process to solicit potential buyers as its board of directors reviews strategic options to maximize shareholder value.

Frenkel Topping, which specializes in providing financial advice to recipients of clinical negligence and personal injury awards, said its board believes that the company may need to combine with a "larger, strategic partner" to fully take advantage of the market opportunities arising from factors such as the change in the U.K. personal injury discount rate, or Ogden rate. The U.K. government in late February revised the rate, which is used to calculate the long-term value of compensation awards, to negative 0.75%.

Frenkel Topping expects the change to lead to a substantial increase in the size of court damages as well as an increase in client preferences for lump sum amounts to be managed, potentially leading to a material uplift in the group's AUM growth rate. The company in 2016 launched an investment management unit, into which over a third of its £745 million in assets under management have since been moved.

The company also expects to grow its AUM by £100 million in 2017 and £180 million in 2018.

Interested parties will be invited to submit proposals to Spencer House Partners LLP, which is advising Frenkel Topping regarding the formal sale process. FinnCap Ltd. will act as adviser to the group in the event that it receives an offer for its entire issued share capital.

Frenkel Topping expects to invite proposals to be made during May.