Liontrust is to boost its assets under management by around 40 per cent after agreeing to acquire Alliance Trust's £2.3bn fund arm.
The Alliance Trust Investments (ATI) team, headed by Peter Michaelis, will transfer across to Liontrust as part of the deal, as will its 11-strong fund range.
Liontrust is paying up to £30m for the business, comprising of £17m in new shares, up to £3m in cash and up to £10m for the net asset value of ATI at the time of deal completion.
ATI's sustainable investment range, which includes the £568m SF Managed fund, the £314m UK Ethical fund and the £234m Monthly Income Bond fund, has been managed by Mr Michaelis and team since 2012, when the manager moved to Alliance Trust from Aviva Investors.
Expected to complete in April 2017, the deal will see Liontrust's assets under management rise from £5.6bn to almost £8bn. ATI made a loss of £2m in 2015 but Liontrust said the business was now trading profitably, albeit once exceptional items were excluded.
Liontrust chief executive John Ions said: “There is strong demand for sustainable investment in the UK and internationally. Increasingly, consumers expect the companies they use to be socially responsible and the demand for sustainable investment will only grow with the rise of millennials."
The deal comes as Alliance Trust completes a strategic review launched in June, a year after the company first came under pressure to reform from activist investor Elliott Advisors.
The investment trust will shift to a multi-manager model, outsourcing its investment management for the first time, as a result of the review.