Carlton Financial Group, a boutique merchant bank run by British financier George Magan and Andrew Taee, a banking entrepreneur, made a loss of more than £2.5m (€3.7m) last year, according to filings at Companies House.

UK banking group HBOS acquired a 9.9% stake in Carlton in September. As part of the deal, HBOS will commit capital to fund property and industrial transactions in which Carlton is involved. The boutique consists of two businesses, Carlton Corporate Finance, an advisory firm, and Carlton Capital Partners, an investment management firm. Carlton Corporate Finance made a loss of £2.1m in 2005, on top of a £2.26m deficit a year earlier. Its turnover fell from £1.1m to £736,218. The funds unit, which has about £100m under management, made a loss of £414,928. Carlton, founded by Magan and Taee in 2004, was reported to be valued at between £20m and £25m. In February, Carlton boosted its investment management business with the hire of Nicolas Wirz, former head of Morgan Stanley's European equity distribution business and director-general of its Paris arm. It also appointed Sir Francis Mackay, chairman of UK catering group Compass, as a non-executive vice-chairman. He became chairman last month. Also last month, Sir Ralph Robins, former chairman of Rolls-Royce, joined as chairman of Carlton's non-executive advisory board.