Henderson Global Investors’ Neil Hermon has divested his holding in F&C Asset Management following the takeover bid from Canadian group BMO.
Mr Hermon said in a client update for his £546m Smaller Companies Investment Trust that the sale of the fund group was one of a pair of disposals during the month.
The proceeds helped him purchase new positions in clothing retailer Koovs and international infrastructure services business Balfour Beatty.
F&C’s share price has risen more than 25 per cent in the past year from 95.2p to 119.7p as of April 22. The rise includes an uptick following news of the bid by the Canadian company.
Shareholders in F&C gave the go-ahead for Canadian financial conglomerate BMO to buy the fund manager last month.
In a shareholder vote on March 25, 99.6 per cent voted in favour of the takeover, which was announced in January. BMO proposed a bid in January of £1.20 per share, which would value the company at roughly £697m based on the 581m shares currently in issue.
The group recently saw investment stalwart Jeremy Tigue announce his retirement. He is expected to leave the group at the end of the year after 33 years’ service.
The group’s director of global strategy Ted Scott also recently announced his retirement but the company has boosted its multi-manager team with the appointment of Scott Spencer.
Mr Hermon said his new position in Koovs was taken in part because of its ambition to exploit the growth of online retail fashion in India.
“We believe it is a credible proposition as it is run by the founders of Asos who have significant experience in this market,” Mr Hermon said.
“We also added to our a position in Balfour Beatty as the company is well positioned to benefit from the recovery in US and UK construction markets.
“To finance these purchases we disposed of our position in F&C Asset Management after an agreed bid from Bank of Montreal. We also disposed of our position in Majestic Wine after the company highlighted a tough start to 2014 trading and increased competition from the supermarkets.”
Mr Hermon said while there were signs the UK’s economic situation was improving he acknowledged the global economy remained “fragile”.
“It is getting harder to argue that equities are cheap but generally corporates are in good health with balance sheets strong and dividends growing,” he said.
“We also expect mergers and acquisitions to see a pick-up from the low levels seen in 2013.”
Mr Hermon has delivered 707 per cent since taking on the trust in November 2002 compared to the 421.2 per cent return from its benchmark Numis NSCI ex Investment Companies index, according to data from FE Analytics.
