Treasury management consultants Sector Treasury Services has swallowed up rival Butlers, the companies have announced, in a move which significantly increases Sector’s market share.
The tie-up, which is set to go live on 25 October, will see Sector take on all Butlers’ contracts. Butlers has around 130 councils on its books and a statement from parent company ICAP insisted there would be “no disruption to the services customers receive”.
The move means there are now just three major players in the local authority treasury management advisory market - and rivals warned the deal could raise competition issues.
Mark Horsfield, a director at rival firm, Arlingclose, which advises 76 local authorities, said: “I guess [whether it raises competition issues] is really up to local authorities to decide but typically they seek to tender from a minimum of three or four providers so it could well be.”
Mr Horsfield added that, despite the potential issues, he did not see the move as a threat to his firm’s business.
ICAP said the move followed a review of its treasury consultancy services and it had decided to leave the market.
John Herbert, CEO EMEA for Money Markets & FX at ICAP, said: “After a thorough review we have decided to withdraw from providing treasury consultancy services and will concentrate on our interdealer broking businesses.”
Sector managing director, David Whelan, heralded the addition of the “respected Butlers team”.
“This unmatched array of specialist expertise, drawn from both the public and private sectors, will work together to support clients as they face the challenge of year on year revenue grant decreases and a requirement to improve services,” he added.