UK-based Formation Group yesterday announced the final sale of assets owned by its asset management arm, Formation Asset Management, to Castlegate Capital, a company controlled by two employees of FAM.

The assets covered by the deal are contracted client income streams, for which Castlegate will pay a multiple of approximately 1.5x the contracted income value over a three-year period, as well as a percentage payment to Formation for new business incomes derived by the clients transferring across to Castlegate.

FAM will be retained by Formation Group for a period while its business is wound down, but will cease trading new business with immediate effect.

Due to the nature of the deal it is difficult to value exactly, but Formation Group expects to realise around £225,000 (approx $369,000) over the three year period from it.

The deal is similar to others struck this August, whereby Formation Group sold its talent management, sports representation, accountancy, taxation and sports corporate finance arms. Earlier this month, WealthBriefing reported that the group was in discussions to sell its asset and wealth management arms in order to concentrate on its property businesses going forward.

The deal comes at a time of heightened M&A activity following the financial crisis; while some firms are seeking to divest assets to streamline their corporate profile or boost their balance sheets, others are looking to accelerate their growth through snapping-up potentially undervalued businesses.