The purchase agreement is an example of the kind of acquisition strategy that AssetCo has flagged as part of its business approach.
AssetCo, London’s AIM-quoted wealth management business, has agreed to buy all of Edinburgh-based SVM Asset Management, paying a total of about £10.7 million ($13.2 million), subject to the completion of balance sheet adjustments.
The payment will be handled by issuing up to £9 million, 1 per cent fixed-rate unsecured convertible loan notes in AssetCo and, subject to balance sheet adjustments, around £1.7 million in cash, in each case to be paid on completion of the acquisition.
As part of the transaction, AssetCo is buying all of SVM Asset Management Holdings, the holding company for SVM Asset Management Limited.
The acquisition is conditional on, inter alia, approval by the FCA to a change in controller which is expected to occur by the end of September 2022. The company will provide further updates, as appropriate, AssetCo said in a statement yesterday.
Founded by Colin McLean and Margaret Lawson in 1990, SVM oversees about £585 million in AuM, composed of various funds including five open-ended funds.
SVM generated turnover of £4.3 million and a pre-tax profit of £2.0 million for the financial year ended 31 December 2021 and had net assets of £14.0 million as at 31 December 2021.
Once the current restructuring is complete, SVM will have net assets and net cash reserves of about £4 million each. For the three months ended 31 March 2022, SVM generated turnover of £945,451 and an operating profit of £139,726.
McLean, managing director and chief investment officer of SVM, will become a director of AssetCo’s Scottish business. Lawson, UK investment director at SVM, will continue in her role managing UK equity portfolios, as will Neil Veitch, global and UK investment director, and Hugh Cuthbert, European investment manager. SVM’s existing 21 employees will continue to be employed by SVM.
Martin Gilbert, chairman of AssetCo, Peter McKellar, its deputy chairman, and Alex HoctorDuncan, chief executive of AssetCo’s listed equity platform and CEO of AssetCo's River and Mercantile asset management business, will join the board of SVM when the acquisition is completed. Gilbert, a high-profile figure in UK asset and wealth management, has been involved in some of the most prominent asset management firms in the UK. He co-founded Aberdeen Asset Management plc in 1983 and was chief executive officer from 1991 to 2017. In 2017 Aberdeen Asset Management merged with Standard Life, creating what was called Standard Life Aberdeen before its rebrand. Gilbert retired from that firm in September 2020.
In August last year AssetCo won regulatory clearance to buy Saracen Fund Managers for £2.75 million ($3.87 billion).
The purchase agreement is an example of the kind of acquisition strategy that AssetCo has flagged as part of its business approach. According to its website, AssetCo is “primarily involved in acquiring, managing and operating asset and wealth management activities and interests, together with other related services."