Gilbert’s AssetCo acquires Saracen Fund Managers
Martin Gilbert: joins board (pic: Terry Murden)
AssetCo, the acquisition vehicle chaired by former Standard Life Aberdeen co-CEO Martin Gilbert, has acquired Edinburgh-based Saracen Fund Managers in a cash and shares deal worth £2.75 million.
The acquisition is conditional on the admission of the new shares to trading on AIM, which is expected by the end of September.
It is AssetCo’s first 100% acquisition after building a 5.8% stake in River & Mercantile earlier this year.
One source told Daily Business: “Martin s looking to build another asset and wealth management business 38 years on since co-founding Aberdeen Asset Management.”
Saracen was founded in the late 1990s and has three funds, operating on the T Bailey Fund Services Limited platform, called Global Income and Growth Fund (c.£103 million of assets under management, UK Alpha Fund (c.£14m of AuM), and UK Income Fund (c.£2m of AuM).
It has an office in Rutland Square and five full time employees, led by CEO Graham Campbell. All will join AssetCo on completion. For the year ended a 31 March 2020 the company generated turnover of £985,364 and a loss after taxation of £15,146. It had net assets of £400,661.
Saracen will continue to operate from Edinburgh under the Saracen brand. Mr Gilbert and Peter McKellar, directors of AssetCo, will join the board of on completion.
AssetCo believes there are significant opportunities to enhance the distribution and appeal of Saracen’s existing funds and to widen the funds offered by Saracen to include immediate adjacencies.
It says Saracen offers the company the opportunity to acquire a FCA regulated entity and the associated authorisations, subject to FCA change in controller approval.
The consideration for the acquisition will be satisfied by the issue of 166,904 new ordinary shares and £664,774 in cash, in each case to be paid on completion.
Mr McKellar, deputy chairman and CEO of AssetCo, commented: “Saracen is a small fund management firm with great potential. Its business model, people and product offering are its key assets and are an ideal fit for AssetCo.
“I’m looking forward to working with Graham and the team. Our focus will be on building on Saracen’s strong foundations, particularly the experience and expertise of its management team and their investment approach. We aim to grow the business through marketing its existing funds and over time broadening its product range to continue to meet the needs of customers.
“The proposed acquisition is part of AssetCo’s overall strategy of acquiring and investing in asset and wealth management businesses.
“The industry is contending with multiple structural shifts, including demographics, fee compression and a greater focus on ESG. These are presenting challenges and opportunities for incumbent firms and we believe we can capitalise on this to help unlock value and to deliver for clients and investors.”
Mr Campbell said: “We’ve known Martin and Peter for some time and are excited about working with them to help grow Saracen’s three existing funds and to develop the overall business.
“Importantly the investment philosophy and team will remain the same. We believe our focus on active management and fundamental research with a long-term mindset is well placed to help investors achieve their financial goals.
“Our clients are supportive of this approach and we are now focused on introducing our funds to a wider range of prospective investors.”