Wealth manager WH Ireland cuts jobs after completing ‘urgent’ search for funds

City wealth manager and broker WH Ireland will cut jobs as it raised “urgently” needed new funding, after warning it could have collapsed if the money was not raised.

It successfully raised £5 million by offering shares at just 3p each, a discount of 86.7%. When the fundraise was announced, WH Ireland said it was in talks with City watchdog the FCA about a potential wind down if it cannot raise that money.

It was below the FCA’s minimum capital requirement by £1.9 million, meaning it needs to find at least that much to avoid being shut down.

“It is necessary urgently to boost the Company’s capital position,” WH Ireland said.

The firm, based near the Monument, said this was necessary as “the widely reported multi-year low level of transactional activity in the financial capital markets” had hit its broker division, while “weaker market conditions” hurt its wealth management arm, leading to a £1.1 million loss.

“In recent weeks, on the basis of the adverse current and forecast trading and resultant losses, the company has been in discussion with the FCA (including in respect of the Group’s relevant net asset and regulatory capital positions) in order to ensure that, in the absence of the injection of further capital pursuant to the placing, the company could deliver a solvent wind down for the Group, if required, in line with the company’s solvent wind down plan,” it said.

It is also cutting jobs in order to reduce its costs, while some senior managers are taking salary cuts and receiving shares in return.

The firm manages close to £2 billion worth of assets.

Shares fell by 65% to 7.9p when markets opened, valluing the entire firm at less than £5 million. At one point, the shares traded at more than 180p.