AssetCo raises £25m for Rize ETF deal; shares fall

Martin Gilbert

Shares of Martin Gilbert’s investment firm AssetCo plc fell about 15% on Thursday to around £17.50 as it announced its intention to conduct a placing of shares at £14.50 to raise £25 million to help fund the £16.5 million acquisition of a 63% equity interest in Rize ETF Limited from J&E Davy Holdings.

AssetCo has committed to a further investment in Rize ETF of £5.25 million to help fund the growth of the business.

AssetCo’s shares have risen roughly 400% over the past 12 months.

The placing price represents a discount of 29% to the closing mid-market price of £20.50 on July 21.

“The total number of placing shares will represent approximately 26% per cent. of the company’s existing issued share capital,” said AssetCo.

“Certain directors of the company, Martin Gilbert, chairman, Peter McKellar, deputy chairman and chief executive officer, and Mark Butcher, non-executive director and Harwood Capital Management and Toscafund Asset Management, being substantial shareholders (as defined by the AIM rules for companies) of the company, intend to participate in the placing.”

Rize ETF is believed to be Europe’s first specialist thematic ETF issuer and currently has over $450 million of assets under management.

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

AssetCo chairman Gilbert is the former co-CEO of Standard Life Aberdeen.

AssetCo CEO Peter McKellar: “The team at Rize has built an impressive thematic ETF platform, based on an incredibly exciting ethos.

“It provides investors access to products that enable them to participate in new and relatable themes and benefit from strong growth led by secular trends.

“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 has the team, pedigree and expertise to grow significantly and to continue to deliver product innovation for investors, building a world class thematic ETF business in the process.

“We are looking forward to working with the Rize ETF team in building the business and delivering value to investors and AssetCo’s shareholders.”

Later on Thursday, AssetCo announced the successful completion of the oversubscribed placing.

“A total of 1,725,000 new ordinary shares have been placed by Numis Securities Ltd, acting as financial adviser and sole bookrunner, and Arden Partners Plc, acting as nominated adviser and broker in connection with the bookbuild, to AssetCo, at a price of 1,450 pence per placing share raising gross proceeds of c.£25.0 million,” said the firm.

“The placing price represents a discount of c.29 per cent. to the closing mid-market price of 2,050 pence per ordinary share on 21 July 2021 …

“… Martin Gilbert, Peter McKellar and Mark Butcher, being directors of the company, and Harwood Capital Management and Toscafund Asset Management LLP, being the substantial shareholders, have subscribed for new Ordinary Shares …”

Gilbert said: “The board and the management team are immensely grateful for the support the placing has received from existing and new shareholders.

“The successful fund raising will help to continue to develop AssetCo, including financing the acquisition of a majority equity interest in Rize ETF and investment in its compelling platform.

“The asset and wealth management industry is having to contend with significant structural shifts, including technological advances and a reorientation of investing habits.

“We are committed to investing, building and managing asset and wealth management businesses.

“Our agility and focus will enable us to deliver value for investors and our shareholders.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.