Gresham House has bought the venture capital trust business of Mobeus Equity Partners for £36.1m.
The deal, which is expected to be completed in the next four weeks, comprises four VCT contracts - Mobeus Income & Growth VCT, Mobeus Income & Growth 2 VCT, Mobeus Income & Growth 4 VCT and The Income & Growth VCT. The four have a combined assets under management of £369m.
In today's (September 10) trading update, Gresham House said the deal will see it create “a leading player” in the VCT segment with a combined £850m of assets under management.
In addition to an initial £24m, £12.1m will be payable over a three-year period, subject to certain criteria being met.
Following the sale, the Mobeus team, consisting of 16 full time employees and a further three consultants, will transfer to Gresham House.
Mobeus partners Trevor Hope and Clive Austin will join Bevan Duncan and Ken Wotton to become the senior management team of Gresham House's strategic equity division.
Hope and Austin will remain responsible for the investment, portfolio, and fund management of the Mobeus VCTs, alongside their investment and operations teams.
Anthony Dalwood, chief executive officer at Gresham House, said: "This acquisition substantially boosts our AUM, profitability and enhances our presence in the VCT segment, accelerating progress towards our GH25 targets.
“The combination of Mobeus with Gresham House's existing VCT business expands our scale and presence in the VCT segment, and our combined complementary strengths will bring what believe are considerable benefits to VCT investors.”
This latest VCT purchase follows Gresham House’s purchase of Livingbridge’s UK operation in 2018, adding £500m to its assets under management. It bought the UK funds business of Livingbridge which included the Baronsmead venture capital trusts, the Livingbridge MicroCap fund and the Livingbridge UK Multi Cap Income fund.
The company said it intends to raise £40m through a placing, which includes a £20m cash placing of 2,197,802 new ordinary shares of 25 pence each, priced at 910 pence per placing share.
It will use £26m for the purchase of Mobeus and the remaining £14m will be used to fund development projects such as battery storage and solar projects, which are intended to be acquired by vehicles managed by Gresham House.
Dalwood added: "The acquisition brings together two of the leading teams and brands to create a VCT platform with c.£850m of AUM. In addition, the Mobeus VCTs' focus on private markets and emphasis on total return is highly complementary to our existing Baronsmead VCTs, which invest in unlisted and public companies to deliver consistent dividends.
"The role of VCTs in supporting emerging and disruptive businesses is closely aligned with Gresham House's ESG-focused investment strategies and I look forward to working closely with the Mobeus team to deliver excellent returns for all our stakeholders."
Gresham House said the purchase gave Mobeus VCTs access to its central resources, existing investment resources and network to support its long-term investment ambitions.