Miton chief considers bolt-on acquisitions

Miton chief considers bolt-on acquisitions

David Barron, chief executive of fund group Miton, has said the firm is on the lookout for acquisitions.

The company reported a 35 per cent jump in its assets under management for the first half of 2018 to £4.53bn.

During that time, the company attracted net inflows of £616m, compared with £195m for the same six month period in 2017.   

Over the past year Miton has launched a trio of funds, a Balanced Multi-Asset mandate run by David Jane and Anthony Rayner, who now run more than £900m of assets across four multi-asset funds. an infrastructure fund run by Jim Wright, and a US smaller companies fund run by Hugh Grieve and Nick Ford.

Mr Grieve and Mr Ford launched the smaller companies fund in May 2018, and were already running the the £480m Miton US Opportunities fund.

Mr Barron said the company is in a healthy financial position with significant net cash and the capacity to raise further capital by issuing new shares if necessary.

He noted the wave of recent merger and acquisition activity in the asset management industry and said: “My view is it is difficult to make big deals work in asset management, there are issues around culture and other things that make it difficult. But as Miton have shown in the past, smaller, bolt on deals can work.”

He said: “We are always happy to talk to talented people, but don’t have to hire anyone, and we don’t have to acquire anyone.

"As our AUM growth shows, we are in fine shape, but there is a lot of merger and acquisition activity in the sector. We want to remain an independent firm though, so you can take it from that, anything we do would be us making bolt on acquisitions.”

Mr Barron revealed he is acutely aware of the previous problems Miton had with “key man risk,” whereby a firm loses a material quantity of its assets under management because one manager leaves.

This happened at Miton when George Godber and Georgina Hamilton resigned in April 2016.

The pair's departure caused the Miton share price to fall by 30 per cent in a single day, as the market feared investors in the Miton UK Value Opportunities fund would flee and join Mr Godber and Ms Hamilton at their next venture.

The fund subsequently shrank from about £850m in size to just over £300m.

Mr Barron said he now believes the company is less reliant on key man risk with about two thirds of the inflows of the company now coming from funds managed by individuals other than the biggest name at the firm, Gervais Williams.