River & Mercantile has posted a bumper set of results ahead of its sale to AssetCo.
The company saw pre-tax profit rise 78 per cent to £11mn in the six months to December 31, compared with the same period in 2020.
Performance fees rose to £7.2mn, and the group saw flows of £1.3bn, and fee-earning assets under management rose 4.9 per cent to £49.9bn.
However, the company saw a post-tax loss of £6.8mn, due to remuneration and transaction costs relating to the sale of its solutions business, and an “impairment of intangible assets” as a result of the loss of institutional discretionary management agreements.
Acquisition
At the end of January it was confirmed that AssetCo will takeover R&M, paying £98.8mn in an all share transaction.
As part of the deal, the cash from the sale of the R&M solutions business to Schroders, some £190m, will also go to R&M shareholders.
AssetCo already has a stake in R&M, whose shareholders will receive 0.73 AssetCo shares for every R&M share they own.
When the return of the cash from the sale of the solutions business is taken into account, the total value of the deal is £289m.
Jonathan Dawson, chairperson of the board at R&M, said he was pleased that the group’s financial performance has been strong.
“Looking ahead, subject to shareholders' approval and change of control permission being granted by the FCA, we will soon be part of AssetCo," he said.
“I think this will be an exciting opportunity for our shareholders, executives and asset managers to participate in the building of a new and ambitious modern asset management company.”
Dawson will join the board of AssetCo as an independent director.
He added that discussions are under way with a number of potential new hires in market segments that are complementary to the group’s business.
“We are also close in launching our new infrastructure fund under Ian Berry and his team who joined R&M last year. This is a very exciting development in private markets where we can establish a very strong proposition for long-term investors.”
Alex Hoctor-Duncan, chief executive of R&M, said after the completion of the sale of the UK solutions business to Schroders, the group has a mandate to accelerate growth, broaden its platform and develop as a differentiated, purpose driven asset management firm.
“We want to deliver impactful investment management and stand out because we are passionate about what we do, and can deliver diversified alpha returns in line with our stated investment style,” he said.
“We look to the future with confidence, notwithstanding the challenging geo-political environment.
"For me, the journey has just started, and this is an exciting time for our business."
sally.hickey@ft.com
