Martin Gilbert’s asset manager AssetCo said it is in “advanced discussions” for two potential joint ventures and that it is proposing to change the firm’s name to River Global plc.
Gilbert said one of AssetCo’s potential joint ventures is with an “established overseas wealth manager” and the other involves “bringing a leading global fund manager to market.”
He said “assets under management are expected to be significant at an early stage.”
AssetCo also said it is planning a proposed share split with the introduction of a second class of share designed to reflect the company’s economic interest in Parmenion.
“It is not expected that these shares will be traded on AIM but will be able to be traded on a matched bargain basis more suitable to the nature of the underlying interest,” said AssetCo.
“The company’s existing shares will as a result, track the interest in the equities business.
“In view of this, we are also planning to publish proposals to change the name of the company to River Global plc. The board expects to issue a formal circular to shareholders seeking approval for these changes in Q3 2024.”
Gilbert said that over the past 18 months AssetCo’s business interests have been simplified considerably and now comprise its wholly owned equities business, trading under the River Global name, and its structured equity interest in the Parmenion platform.
“The board believes that the factors driving value in these two lines of business differ significantly in terms of both quantum and timing and that, as a result, they have the potential to appeal to quite different types of investor.
“In order to better reflect this, and to fully realise the benefit that might result from allowing new and existing investors to access these different value profiles directly, the board is planning to publish proposals for a share split shortly.”
The corporate updates were included in the firm’s half year report for the six months ended March 31, 2024, showing operating loss was cut by 65% to £1.6 million “after adjusting for exceptional items (£1.0m) and before discontinued operations (£0.5m) demonstrating good progress towards profitability …”
Total loss for the period was £3 million.
AssetCo reported “strong progress” at Parmenion with assets under management and advice now approaching £12 billion, up from £10.6 billion at the end of March 2023.
Gilbert, AssetCo chairman, wrote: “The six months to end March 2024 has been a pivotal one in our journey towards profitability and cash generation.
“The work done in simplifying our business by consolidating equity asset management activities and exiting loss making and complex early stage businesses has helped clear a pathway towards profitability which, with continued hard work and effective execution of our cost saving plan, is starting to look eminently achievable.
“There remains a dependency on stable revenues but, in that context, it is particularly pleasing to note a couple of substantive and notable wins in UK equities with, finally, some tentative signs of improvement in market sentiment towards the asset class.
“I am also pleased to confirm that we are in advanced discussions to partner with two organisations to leverage our expertise and infrastructure to mutual benefit.
“These potential joint ventures are quite different (one working with an established overseas wealth manager and one bringing a leading global fund manager to market) but both would utilise our established infrastructure to facilitate additional growth.
“Assets under management are expected to be significant at an early stage and, while initial revenues to the group are reduced reflecting the role we play in each case, the additional scale and future opportunities are attractive as is the opportunity to work with high calibre individuals and businesses.
“Continuing revenues for the six months ended 31 March 2024 of £6.9m (31 March 2023 Restated: £7.1m) have held up relatively well in a turbulent period and the business, while still loss-making, has demonstrated real progress towards profitability, making excellent progress in cost cutting since last year.”