Two of the things folk in our industry like to do whenever canapes are taken is to speculate on where the next M&A transaction will come from, and then decry that such deals hardly ever work.
For those on the other side of the trade, ie actually doing the buying or selling, the same words are usually trotted out to justify the deals. Notably "synergies" and "complementary product ranges".
With that in mind, we thought we would take a look at the levels of DFM ownership of Liontrust and Gam funds as those firms prepare to combine.
As our table below shows, Liontrust's dominance in the world of UK equities is unquestionable but Gam's fabled strength in fixed income (which is an area of weakness for Liontrust) hasn't really translated into demand from DFMs, with only its specialist fixed income funds having much traction.
The funds in question are Gam Star Credit Opportunities, which is held by one DFM, and Gam Star MBS Total Return.
In contrast, Liontrust Sustainable Future Monthly Income is held by two DFMs and Liontrust Strategic Bond is held by one.
Other than specialist bonds, the only other area where Gam is more popular than Liontrust is in emerging market equities - but that’s mainly due to the one DFM holding Gam Emerging Equity.
Liontrust's strength is even further pronounced in ESG portfolios. The Liontrust Sustainable Future Corporate Bond appears in six ESG portfolios and is the third most popular corporate bond fund (not a single Gam fund appears in our ESG database).
The latter is an important point because while Liontrust's conventional bond strategies haven't grown much, its ESG bond range is managed by the sustainable investment division, which is one of the largest in the industry.
Outside of the fixed income space, Gam has managed to gain very little ground among the DFMs we cover. Only its Gam Star Disruptive Growth fund is owned by more than one of the DFMs we cover.
That may mean they avoid the Jupiter/Merian farrago of having many funds which do the same job and with investors wondering if the fund they hold will continue to exist for much longer (a situation which exists to this day with, for example, a Jupiter Strategic Bond fund and a Merian Global Strategic Bond fund continuing to ply their trades under different managers).
But perhaps that gives the Liontrust/Gam deal half a chance of defying the industry odds and being a merger that works.