AssetCo is set to continue its expansion after announcing rising annual profits and a quadrupling in share value.
The group’s preliminary results for the year to September 30, 2021 showed pre-tax profits of £16.1m – up from £3.4m in 2020 – while its capital position fell from 32 £.3m to £56.1m.
Over the 12 month period, AssetCo’s share price more than quadrupled to close at £17.00 per share, up from £4.11 per share in 2020.
This growth follows the acquisition of stakes in Rise ETF, Parmenion, Saracen Fund Managers and, more recently, River and Mercantile.
Chairman Martin Gilbert, whose senior team now includes several former colleagues from Aberdeen Asset Management, called the past year “transformational”.
He said: “The company is in the process of transformation and has successfully put in place some of the building blocks needed to become a 21st century asset and wealth management business that delivers to investors and makes a difference.
“We will look to grow these businesses and explore other opportunities.”
AssetCo’s new strategy is focused on building and operating an asset and wealth management business – which has grown from zero to £9.6bn of assets under management.
Gilbert added: “The industry is facing significant structural changes, including technological advances, shifting investment habits and changing customer needs that will have a profound impact on the business models of many asset management providers. ‘existing assets and wealth, their offerings and the choices available to clients and savers.’
In early October 2020, the company closed the Grant Thornton litigation case, with the professional services firm deciding not to appeal to the Supreme Court, crystallizing attribution of the January 31 Court of Appeals decision. 2019 in the amount of £30.5 million including fees.
This formed the basis for returning £26.9m to shareholders, through a takeover bid which was fully subscribed. The company purchased 6.53 million shares, or 50% of its then issued share capital, at £4.11 per share.
Transactions in 2021 included the acquisition of active equity manager Saracen for £3.44m, taking a majority stake in Exchange-Trade Funds company Rize for £16.5m and a stake of 30% in the Parmenion fund platform for 27.8 million pounds sterling.
After taking a stake last year, AssetCo earlier this month made a £98.8m bid to acquire River and Mercantile Group, following the sale of the River and Mercantile Solutions division to Schroders.
“This strengthens our active equity capability and is most importantly a cornerstone for building a business in private markets given its infrastructure investment team,” explained Gilbert, adding, “It will complement our existing presence in thematic investing with Rize ETF and our investment in Parmenion, a digital platform for the financial planning industry.”
However, last week River & Mercantile announced that it had lost a £927m mandate on several of its global equity strategies.
In a note to the Stock Exchange, the firm said it had received a redemption notice from a client of its equity management division. The assets account for £2.8 million of the company’s annual turnover.
Managing Director, Campbell Fleming, said: “The asset and wealth management industry is going through a period of significant change, including advances in technology, changing investor needs and habits.
“To address these structural changes, the companies we have invested in encompass four key areas: active management in public and private markets, high growth thematic investing, ESG and digital solutions.
“I am confident that AssetCo has laid the foundations to continue to grow organically and through selective acquisitions and, above all, to meet the needs of investors.”
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