The deals company set up by former Standard Life Aberdeen co-chief executive Martin Gilbert has acquired a 63% stake in one of Europe’s fledgling exchange traded fund providers.
In the latest fund management transaction secured by the City grandee in recent months, AssetCo, which has the backing of Gilbert and a cohort of other heavyweight investors, has struck a deal to acquire the stake in Rize ETF — a thematic ETF provider set up in 2019 by a team of former Legal & General Investment Management employees.
AssetCo will pay £16.5m in cash for the stake, and will commit a further £5.25m investment in the business to fund growth.
Gordon Neilly, an adviser to AssetCo, and Gary Collins, head of distribution at AssetCo, will join the board of Rize ETF following the acquisition, which is due to complete by the end of July.
The London-based ETF provider currently employs nine people and has launched four thematic ETFs, which have raised more than $450m in assets.
AssetCo is tapping into a booming segment of the market with the deal; Morningstar research shows that global thematic fund assets grew to $595bn at the end of March, up from $174bn three years ago, with European funds accounting for more than half this total.
Peter McKellar, deputy chair and CEO of AssetCo, said: “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.”
The Rize ETF deal is the latest struck by Gilbert, whose personal stake in AssetCo represents around 10% of the cash shell. The fund management veteran earned a reputation as a prolific dealmaker when he was at the helm of Aberdeen Asset Management — the asset manager he co-founded in 1983.
In May, AssetCo made its first outright acquisition, agreeing to buy Edinburgh-based Saracen Fund Managers for £2.8m.
Earlier this year the company doubled its holding in River & Mercantile to 5.9%.
At the start of July, AssetCo announced it had acquired a 30% stake in Parmenion – the investment platform business which Gilbert’s former firm put up for sale last November shortly after Stephen Bird took over as CEO of Standard Life Aberdeen.
Parmeion was acquired by private equity house Preservation Capital Partners in March for £102m.
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