NatWest Group has agreed to purchase wealth manager Evelyn Partners, a move indicating the British bank's ambition to expand its services for high-net-worth clients in its domestic market. According to a statement released on Monday, the Edinburgh-based bank will acquire Evelyn for £2.7 billion, including debt, marking the largest exit of a private equity-backed wealth manager in UK history. Evelyn, previously known as Tilney Smith & Williamson, has been held by buyout firm Permira for over a decade, with Warburg Pincus becoming a minority investor in 2020. The firm currently manages approximately £69 billion in client assets. Upon completion, the combined entity will have £127 billion in assets under management and administration, with total client assets and liabilities reaching £188 billion. The acquisition of Evelyn is expected to accelerate CEO Paul Thwaite's strategy to streamline NatWest's operations and expand in priority growth areas, particularly wealth management and high-net-worth client services. Strengthening its fee-based wealth management business will also help the bank diversify its revenue streams and reduce reliance on lending and mortgage income as interest rates moderate. Thwaite stated, "This is a highly attractive use of capital both strategically and financially, enhancing revenue diversification and strengthening returns in high-growth areas to deliver sustainable long-term value creation." Additionally, NatWest announced a £750 million share repurchase program. This acquisition represents the bank's first major deal since the UK government's plan to sell its remaining stake by 2025. The government had previously bailed out NatWest's predecessor, Royal Bank of Scotland, with £46 billion during the 2008 financial crisis. In recent years, rising regulatory, technological, and operational costs have spurred a wave of mergers in the wealth management industry, encouraging firms to consolidate to address challenges. Despite this, valuations of major players like publicly listed St. James's Place Plc and Quilter Plc have recently recovered as a large, relatively affluent generation of Britons approaches retirement, driving demand for wealth services. The transaction will be funded from existing resources and is projected to reduce NatWest's Common Equity Tier 1 (CET1) ratio, a key measure of financial strength, by approximately 130 basis points. NatWest indicated that the deal would positively contribute to growth and return on tangible equity in the first full year of ownership, with returns exceeding those achievable through share buybacks. According to the statement, Evelyn reported £179 million in full-year EBITDA for the 2025 fiscal year, implying a valuation of 9.7 times enterprise value to EBITDA. The acquisition is also expected to generate around £100 million in annual run-rate cost synergies, equivalent to roughly 10% of the combined cost base of the private banking and wealth management operations. However, analysts at Jefferies noted that the deal would dilute NatWest's earnings per share and tangible net asset value while reducing near-term buyback capacity. The bank's shares fell as much as 5.5% in early London trading.