AssetCo Group has agreed to sell its stake in subsidiary River and Mercantile Holdings (RMI) to partners of RMI led by its chief Ian Berry. The sale is expected to close in the fourth quarter of this year, and RMI will continue managing and operating the business outside the AssetCo Group. This decision was made to optimize the prospects for the River and Mercantile Infrastructure Income Fund, which RMI advises.
AssetCo Group to Sell Stake in RMI Subsidiary, Focusing on Active Equities Business
AssetCo Group, a leading investment firm, has announced its decision to sell its stake in subsidiary River and Mercantile Holdings (RMI) to partners of RMI, led by its chief, Ian Berry. The sale is expected to be completed in the fourth quarter of this year, allowing RMI to operate independently outside the AssetCo Group.
RMI’s primary activity is serving as an investment adviser to the River and Mercantile Infrastructure Income Fund, which was launched in 2022 and made its first investments in the same year. The sale of RMI was endorsed by all parties involved, as they believe that operating outside AssetCo will optimize the prospects for the Fund and the business.
The management fee revenues for the year ending September 30, 2023, earned by RMI on behalf of the Group, are estimated at £0.53 million. However, RMI is expected to incur a loss of £0.75 million before non-recurring items for the same period. AssetCo made a provision of £1.7 million in its Interim Results published in June 2023 against assets held on the balance sheet relating to RMI. Currently, the gross balance sheet assets stand at an estimated £2.5 million (£0.5 million net).
The consideration for the transaction is a nominal figure of £1. However, the release from certain previous obligations will result in a write back of £0.7 million. AssetCo executive chair, Martin Gilbert, expressed his satisfaction with the agreement, stating that it will allow RMI to reshape its business and focus on delivering the best outcome for the Fund’s clients. Meanwhile, AssetCo will concentrate on building its active equities business.
This decision comes shortly after AssetCo completed its acquisition of the entire issued share capital of Ocean Dial Asset Management from Avendus Capital Asset Management (UK). The necessary clearances from the Financial Conduct Authority and Indian regulators were obtained. The initial consideration for the acquisition was satisfied by the delivery of 1,464,129 ordinary shares of 1p each in the capital of the company and £2.46 million in cash.
In conclusion, the sale of AssetCo’s stake in RMI to its partners will allow RMI to operate independently and focus on optimizing the prospects for the River and Mercantile Infrastructure Income Fund. AssetCo, on the other hand, will shift its focus to building its active equities business. This strategic move highlights the commitment to adapt and grow in the ever-changing investment landscape.