Industry Updates

AssetCo eyes River and Mercantile strategies for ETFs following £100m acquisition

Follows the purchase of Rize ETF by AssetCo in July 2021

Theo Andrew

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Martin Gilbert’s AssetCo said it would look to transfer some of River and Mercantile Group’s (RMG) strategies into ETFs after it acquired the firm for £100m.

Announcing the deal on 25 January, AssetCo said there was “material value” in leveraging other parts of the business to broaden both investor appeal and product distribution.

It comes after the consolidation vehicle purchased a majority stake in thematic ETF specialist Rize ETF last July, shortly after it took a 30% stake in wealth manager Parmenion in the same month.

In a statement, AssetCo said: “There is material value in leveraging other elements of the AssetCo business and strategy to increase the value of RMG through wider investor appeal, through the way strategies are distributed or the form in which they are delivered.

“For example, AssetCo offers RMG the opportunity to move some of its strategies into ETFs and enhance its distribution, both in the UK and offshore, through the extensive relationships AssetCo has with the world's leading asset allocators.”

It added the deal was part of building an agile asset and wealth manager that “meets the needs of tomorrow’s investor” through technological advances, ESG strategies and thematic investing.

RMG equities business currently houses £4.2bn in assets under management (AUM) spanning UK, European and global equities.

Commenting on the acquisition, Martin Gilbert, chairman of AssetCo, said: “The asset and wealth management industry is contending with significant structural shifts, including technological advances, a reorientation of investing and evolving client needs.

“We are committed to building an agile asset and wealth manager that is fit for purpose in the 21st century. RMG complements our existing presence in thematic investing with Rize ETF and our investment in Parmenion, a digital platform for the financial planning sector.”

Following the investment from AssetCo, Rize ETF has expanded its product range to six ETFs with $500m in assets under management (AUM) as it continues to expand the business.

Speaking at the ETF Stream Ecosystem Unwrapped in May last year, Gilbert, the founder of Aberdeen Asset Management, said one of the biggest mistakes of his tenure at Aberdeen AM was not realising how big and quickly the €1.6trn European ETF industry would grow.

The RMG acquisition is the fourth purchase the group has made since Gilbert was appointed AssetCo chairman in March 2021 after it also acquired boutique fund manager Saracen in May last year.

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