The AssetCo investment business being built up by sector veteran Martin Gilbert yesterday highlighted its appetite for further Scottish acquisitions as it announced its £2.8 million purchase of Edinburgh-based Revera Asset Management.
Peter McKellar, deputy chairman and executive director of AssetCo, said: “Martin and I are very keen to see a strong presence for AssetCo in Scotland.”
Referring to the acquisition last year of Saracen Fund Managers, which like Revera is based in Rutland Square in Edinburgh, Mr McKellar added: “Revera and Saracen are very much the start of that…We continue to look for potential acquisitions in Scotland.”
Revera has assets under management of about £118 million.
Mr McKellar noted the “significant majority” of Revera is owned by fund managers Glen Nimmo and Stephen Grant, and sales and marketing director David Hutchison.
Mr Nimmo is chief executive of Revera, and Mr Grant is investment director.
John Johnston, the co-founder of Revera who stepped down as chief executive in 2007 around four years after the launch of the investment house, is a “small shareholder” in the business, Mr McKellar said.
Martin Gilbert, who built up Aberdeen Asset Management, owns 8.6% of AssetCo, which noted last month that its planned acquisition of River and Mercantile would take its assets under management to more than £12 billion. Mr Gilbert bought into AssetCo last year, and became chairman. Harwood Capital Management is now the largest shareholder in the acquisitive AssetCo, with a 21.3% stake, and ToscaFund Asset Management has a 12.4% holding.
Mr McKellar said all of Revera’s team, comprising four full-time employees and one part-time member of staff, would remain with the business. He flagged plans to bring together Saracen and Revera in one office, highlighting the fact both are in Rutland Square.
Saracen Fund Managers continues to be run by investment industry veteran Graham Campbell.
Mr McKellar said of the Revera deal: “This is about building the business through additional distribution support from us. This is not about cost synergies.”
The consideration for Revera will comprise 54,639 new Ordinary shares in AssetCo and £1.9m in cash.
AssetCo noted Revera has two funds, the open-ended S&W Revera UK Dynamic Fund, with around £108m of assets under management, and the £10m Skye Trust, a family trust.
It added that these funds operate on the Smith & Williamson Fund Administration platform.
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AssetCo noted Revera generated turnover of £782,161 and a profit after taxation of £63,452 for the financial year ended December 31, 2020. It had net assets of £548,872 and a net cash balance of £539,135 at December 31, 2020.
Mr McKellar and Gary Collins, who is head of distribution at AssetCo, will join the board of Revera on completion of the deal.
AssetCo said: “The board of the company believes that there exist significant opportunities to enhance the distribution and appeal of Revera’s principal fund and to widen the funds offered by Revera and Saracen to include adjacencies.”
Campbell Fleming, chief executive of AssetCo, said: “Revera is home to a couple of highly regarded and experienced fund managers in Glen Nimmo and Stephen Grant. The deal demonstrates the appeal of AssetCo’s mission and business model.
“The acquisition of Revera is the next step in our plan to establish an active equity platform as part of our overall strategy to build an asset and wealth management business that delivers for investors in the 21st century. Our active equity platform will offer a range of products and investment styles to cater for clients’ evolving needs.”
He added: “The acquisition also demonstrates our commitment to a presence in Scotland, where there is a genuine breadth and depth of talent. We expect Edinburgh to be home to a sizeable and growing proportion of AssetCo’s investment capabilities, adding new teams and businesses as opportunities arise. I look forward to working with Glen, Stephen and the Revera team, welcoming them to the AssetCo stable and developing our active equity platform.”
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Mr Nimmo said: “The entire Revera team is excited to be joining the AssetCo stable. We have been impressed by its dynamism since the launch of its strategy, and believe that the next phase of our development will be accelerated by leveraging its distribution capabilities and working alongside like-minded teams in the Edinburgh operation.”
He added: “We are particularly keen to start working alongside our friends of many years, Saracen. Most importantly, however, we believe that our clients will benefit as we retain our commitment and focus to our investment offering, within an organisation with greater operational capabilities.”