InvestmentsJul 22 2021

Gilbert's AssetCo takes 63% stake in Rize ETF

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Gilbert's AssetCo takes 63% stake in Rize ETF
Jason Alden/Bloomberg
ByAmy Austin

AssetCo, chaired by former Standard Life Aberdeen joint chief executive Martin Gilbert, is acquiring a 63 per cent stake in Rize ETF in a deal worth £16.5m.

According to an announcement to the stock exchange this morning (July 22), the firm is also committing a further £5.25m to help fund the growth of Rize ETF.

The equity stake will be acquired from J&E Davy Holdings, with the acquisition expected to close on July 27, 2021 and not conditional on regulatory approvals.

The deal is being financed by a placing of new ordinary shares at a price of 1,450p per share.

It is intended that shares will be issued to new and existing investors, raising gross proceeds of approximately £25m. 

Certain directors of the company, including chairman Gilbert and Peter McKellar, deputy chairman and chief executive officer, intend to participate in the placing.

Following the deal, management and employees will own an effective 37 per cent equity interest in Rize ETF, of which 5 per cent is subject to certain near-term performance conditions.

AssetCo’s McKellar said: “The Rize approach to product development echoes one of the fundamental principles on which AssetCo's strategy is based: that a new approach to asset management, unbridled by legacy constraints and ways of doing things, will drive significant growth, as technology led manufacturing and distribution of investment products tap into the new, emerging trends in the way the next generation of investors choose to allocate their capital.

“Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers."

Rize ETF, which calls itself Europe's first thematic issuer of ETFs, currently has $450m (£327.4m) of assets under management, having launched its first ETF in February 2020. 

The ETFs are marketed using traditional and digital channels and distributed primarily through IFAs, private banks, wealth managers, family offices and discretionary fund managers. 

Following completion of the acquisition, Gordon Neilly, an adviser to AssetCo, and Gary Collins, head of distribution at AssetCo, will join the board of Rize ETF.

AssetCo appointed Gilbert as chairman in March as the business planned to pursue a new strategy of acquisitions.

Earlier this month, it acquired a 30 per cent equity stake in Parmenion Capital Partners, in a deal worth up to £27.8m.

In May, it acquired Edinburgh-based Saracen Fund Managers for £2.75m.

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