Martin Gilbert’s AssetCo has bought SVM Asset Management for £10.7mn, subject to regulatory approval.
In a stock market update today (June 21), AssetCo said it will pay £10.7m for the Scottish fund firm, paid by £1.7mn in cash and the issue of up to £9mn 1 per cent fixed rate convertible loan notes.
The loan notes may be converted into fully paid ordinary shares of 10p each in AssetCo at an effective issue price of £14.50. Unless converted the loan notes will be repaid on December 31, 2023.
The purchase is subject to the completion of balance sheet adjustments and approval by the Financial Conduct Authority, which is expected to occur by September 2022.
SVM is an independent, FCA regulated fund management business based in Edinburgh and was founded in 1990 by Colin McLean and Margaret Lawson.
McLean and Lawson, together with a family trust, are the significant majority owners of the firm.
Following completion of the acquisition, Mclean, who is managing director and chief investment officer of SVM, will become a director of AssetCo's Scottish business.
He will focus on ensuring a smooth transition for SVM's business and its clients, as well as helping to set the strategic direction of AssetCo's Scottish business.
It is AssetCo's intention to build a strong asset management hub in Edinburgh, focused on managing listed equities.
McLean said: "When I set up SVM our aim was to leverage quality research and strong fundamentals to underpin our independent thinking and deliver great investor value. I believe that our performance over the years demonstrates that we have been able to achieve this.
“I am pleased that with the backing of AssetCo we will be able to continue to build our focus on, and relationships with, existing clients, creating greater value for them, whilst also broadening our client base and growing assets."
Meanwhile Lawson, who is UK investment director at SVM, will continue in her role managing UK equity portfolios, as will Neil Veitch, global and UK investment director, and Hugh Cuthbert, European investment manager.
As part of the deal, SVM's existing 21 employees will continue to be employed by SVM.
To support the continued growth of SVM and AssetCo's Scottish business, chair Martin Gilbert, deputy chair Peter McKellar, and chief executive officer Alex Hoctor-Duncan, will join the board of SVM on completion of the acquisition.
Gilbert said: "We are immensely proud to be building an asset management hub in Edinburgh that, over time, will broaden its client base across the UK and beyond. SVM is a well-regarded fund management firm, with a recognised investment style and a very strong investment track record. Its business model, people and product offering are its key assets, and it is core to AssetCo's ambitions.
"I have known Colin and Margaret for over 30 years, and I am delighted that both have agreed to remain with SVM. Both have built phenomenal reputations as investment managers over many decades in the industry. The experience and expertise they will bring to AssetCo will be invaluable.”
SVM currently has around £586mn of assets under management, including five open-end funds: UK Growth, UK Opportunities, Continental Europe, All Europe SRI and World Equity.
The firm also manages SVM UK Emerging Fund plc, a £6.8mn investment trust listed on the London Stock Exchange.
Gilbert added: “I am also heartened that fund managers of the calibre of Hugh and Neil have committed to the business, as they have important roles to play. We are looking forward to working with the four of them, and the rest of the SVM team, as we develop a business to meet the evolving long-term financial needs of investors."
In January, AssetCo confirmed its takeover of River & Mercantile, with the firm paying £98.8mn for the company in an all share transaction.
In February, AssetCo acquired Revera Asset Management for £2.8mn as part of its plan to establish an active equities business, a month after its takeover of River & Mercantile.
sonia.rach@ft.com
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