Blue Sky bought by investment banking giant Incapital

Blue Sky Asset Management has been bought by the European arm of US investment bank Incapital as part of a new targeted approach to work with IFAs and wealth managers in the UK.

Blue Sky, which was launched by Chris Taylor, James Chu and Mark Dickson in 2007, was bought for an undisclosed sum by Incapital Europe, Incapital's UK-based affiliate.

As part of the terms of the takeover, Taylor, Chu and Dickson have all become managing directors of Incapital Europe, and have received equity in the parent company.

Taylor said Blue Sky and other independent providers of structured products had become 'too small and fragile' in the wake of the collapse of Lehman Brothers, with investors now much more concerned about counterparty risks and capital strength.

Blue Sky had been approached by a number of firms about a potential takeover before agreeing a deal with Incapital. Taylor said the takeover gave the business the financial security it needed to grow the business and provide solutions for the clients of IFAs.

He said: 'Independent firms active in the UK have lacked the capability and capital to operate at the highest level - or to satisfy the increasingly deep due diligence processes and requirements of advisers and investors. This trans-Atlantic deal creates an independent provider capable of competing at the highest level.'

In its new guise Incapital will continue to offer bespoke investment solutions to IFAs and wealth managers. Incapital Europe will also look to provide clients of advisers with a range of other investment solutions, including portfolios of fixed income bonds.

Incapital will deal solely with wealth managers and IFAs, and Taylor added the companies new parent had opened up a range of opportunities to work with a wider range of investment banks, allowing IFAs to diversify their clients' exposure to counterparties.

He said: 'Advisers in the US and UK are acutely aware of their responsibility to mitigate credit exposure in their clients' portfolios. Incapital Europe can provide access to the largest banking institutions in the world as counterparties and that will help to decrease concentration.'

Incapital Europe also plans to offer educational resources for UK advisers to increase the knowledge and understanding of structured products.