Martin Gilbert’s AssetCo agrees its biggest takeover

Martin Gilbert has struck his biggest deal since leaving Standard Life Aberdeen, buying asset manager River and Mercantile in an all-share takeover that values the business at almost £100m.

Under the terms of the deal, R&M shareholders will own 41.6 per cent of the enlarged group. They will also receive $190m in cash from the sale of R&M’s solutions business to Schroders, a deal that was announced last year and has been approved by the FCA.

Overall, R&M shareholders will receive £289m, or 335p per share from the two deals.

Gilbert made his name building up Aberdeen Asset Management, before it was bought by Standard Life in 2017.

Regarded as one of the investment industry’s most prolific dealmakers, his ambition is to build AssetCo into a new force. The Aim-listed company had almost £50bn under management at the end of last year.

It acquired Saracen Fund Managers, the Scottish asset management boutique, in 2021 and also holds stakes in Rize ETF and Parmenion, an advisory business previously owned by Abrdn.

“River and Mercantile is a great fit for us, given its people, investment capabilities and client base,” Gilbert told the Financial Times. “It strengthens our active equity platform and its infrastructure strategy will be the corner stone of our private markets franchise. We are well placed to grow AssetCo organically complemented by some additional strategic acquisitions.”

Gilbert is also chair of digital bank Revolut and the advisory board of Lars Windhorst’s Tennor Group.

AssetCo’s path to completing the deal was helped by the withdrawal of a rival suitor, Premier Miton, which made an approach to R&M in December before deciding this month to end discussions about a possible offer.

R&M chair Jonathan Dawson said the takeover “confirms the board’s view that the market was undervaluing R&M.”

The asset manager’s share price closed at 300p on Tuesday.

“The board believes that the offer from AssetCo not only represents good value to shareholders, but provides our clients and colleagues with a powerful investment platform led by a team with deep experience in the asset management industry,” he added.

R&M also released a trading statement on Tuesday which showed it had attracted net inflows of £1.3bn for the six months to December 31 after registering net outflows of £68m in the same period in the previous year.

The improvement in investor inflows was blunted by net withdrawals of £847m from the institutional business in the second half of last year, the majority of which related to adjustments in investment allocations following regulatory changes in Australia.

R&M said its pipeline of new business was “continuing to build” with £200m of seed capital confirmed for the launch of two sustainable investment strategies and a new infrastructure fund that will focus on UK renewable energy projects also ready for launch.