Shares in Martin Gilbert’s asset management acquisition vehicle have faced a bumpy ride after it announced a deal to tap shareholders for £25million to fund its latest buy, a “thematic” exchange traded fund (ETF) specialist.
AssetCo shares closed nearly 15% lower after it revealed an agreement to acquire an effective 63% stake in Rize ETF for £16.5million, while pledging a further £5.25m to “help fund the growth of the business”.
The company insisted “substantial shareholders” including Mr Gilbert as well as chief executive Peter McKellar, non-executive director Mark Butcher, alongside Harwood Capital Management and Toscafund Asset Management, would take part in the placing. It added in its placing announcement that it “has a clearly defined strategy of acquiring, managing and operating asset and wealth management activities and interests, together with other related services”.
The firm will acquire the shares in the ETF firm from J&E Davy Holdings, the owner of Ireland’s Ireland’s largest stockbroker, Davey Group. The rest of the shares in Rize ETF are held my management and employees.
The business was founded in 2019 and has over $450million (£327.4m) of assets under management.
Compelling megatrends
It offers investors access to assets via tracker funds. Rize ETF currently offers investors four main themes which it identifies as “compelling megatrends”. These are: cybersecurity and data privacy; educational tech and digital learning; medical cannabis and life sciences; and sustainable future of food.
Mr Gilbert, chairman of the investment vehicle, bought into AssetCo in January by taking a 29.8% stake in partnership with Mr McKellar, former global head of private markets at Aberdeen Standard Investments, and funds managed by Toscafund.
The company has completed a number of acquisitions since including Edinburgh-based Saracen Fund Managers for £2.75 million in March and a £27.8 million deal to acquire 30% of Parmenion Capital Partners earlier this month
In a statement, Mr McKellar explained why the deal appealed. He said: “The team at Rize has built an impressive thematic ETF platform, based on an incredibly exciting ethos.
A new approach to asset management, unbridled by legacy constraints and ways of doing things, will drive significant growth.”
Peter McKellar, chief executive, AssetCo
“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.”
