Clydes ends merger trials

Clyde & Co is preparing for a review of its aviation insurance practice later this year when a two-year honeymoon period for legacy Beaumont & Sons partners ends on 30 June.

The 10 partners who joined Clydes when it acquired the former aviation boutique in July 2005 are facing de-equitisation or expulsion from the firm when the lock-in finishes.

A source says the dearth in major airline catastrophes has reduced fee income for a team that already had considerably lower profitability than Clydes at the time of the merger.

“Many of the Beaumont partners had equity shares that were greater than the business they generated,” said the source. “It always was a top-heavy practice.”

Clydes’ average profit per equity partner in 2005 stood at £500,000, while Beaumont’s was in the region of £280,000. The larger firm needed a unanimous vote from Beaumont partners to make the deal happen and so agreed a protected status for two years.

Clydes senior partner Michael Payton confirmed that his firm had agreed levels of remuneration for the incoming Beaumont partners, but argued that the team had performed well since joining.