Martin Gilbert’s investment firm AssetCo plc has announced results for the year ended September 30, 2021, during which it grew its assets under management from zero to £9.6 billion.
AssetCo’s recently-announced acquisition of River and Mercantile Group (RMG), subject to shareholder and regulatory approval, would increase those assets to over £12 billion, even though RMG this week announced the loss of a £927 million mandate.
Gilbert’s firm has said that RMG, together with AssetCo’s Edinburgh-based active equities asset manager Saracen Fund Managers, would form the foundation for the group’s active equities business.
Profit before taxation for the year soared to £16.1 million from £3.4 million in 2020 and the firm’s share price more than quadrupled to close at £17 per share during the 12-month period.
AssetCo chairman Gilbert said in his outlook: “The acquisition of River and Mercantile’s remaining business is a core part of the company’s strategy; it strengthens our active equity capability and importantly provides a foundation stone to building a private markets business given its infrastructure investment team.
“It will complement our existing presence in thematic investing with Rize ETF and our investment in Parmenion, a digital platform for the financial planning sector.
“The company is being transformed and has successfully put in place some of the building blocks required for it to become a 21st century asset and wealth management business that delivers for investors and makes a difference.
“We will look to develop these businesses and explore other opportunities. “
AssetCo CEO Campbell Fleming said: “I am immensely proud of the progress AssetCo has made over the past year.
“Thanks to the hard work of our chairman and deputy chairman, Martin Gilbert and Peter McKellar, and the rest of the team, AssetCo has been transformed into an agile asset and wealth management business, not burdened by legacy issues, constraints or complexities.
“The asset and wealth management industry is going through a period of significant change including technological advances, evolving investor needs and habits.
“To address these structural shifts the businesses we have invested in encompass four key areas – active management in both public and private markets, high growth thematic investing, ESG and digital solutions.
“Saracen Fund Managers, Rize ETF and Parmenion are well placed to take advantage of the changing landscape to meet client needs.
“The potential acquisition of River and Mercantile, subject to shareholder and regulatory approval, will augment our strategy and will become a core part of our equity platform and the cornerstone of our private markets offering as well as increasing our AuM to over £12 billion.
“I am confident that AssetCo has established the foundations to continue to grow organically and through selective acquisitions and most importantly to deliver for investors.”
On February 15, River and Mercantile Group said in a stock exchange statement it received notice from a client of its equities asset management business “of the client’s intention to redeem approximately £927 million of assets managed by the company across several global equity strategies.”
The assets to be redeemed represent annualised revenue to the company of £2.8 million.
River and Mercantile Group CEO Alex Hoctor-Duncan said: “We are an organization focused on moving forward, delivering high quality active equities and infrastructure fund management to our clients.
“Losing a client is disappointing, but we are gearing up for several fund launches and will welcome Matt Hudson to run our UK income fund at the end of this month.
“The motivation of the team is apparent, especially now that we are a specialist equities and real assets focused business …”