Active fund manager Liontrust (LIO), has agreed to acquire River Global’s (RVRG) asset management arm in an all-share deal worth up to £9.7 million.
Led by CEO John Ions, Liontrust said the deal will further expand Liontrust’s investment talent and broaden its client base.
Liontrust expects the deal will be enhance its earnings in the year to March 2027 and prove ‘materially accretive’ in future years. Shares in Liontrust ticked up 4.5% to 256p on the news, while Martin Gilbert-chaired River Global rallied 30% to 4.4p.
Gathering assets
Liontrust is acquiring River Global Holdings Limited, which was formed by bringing together River & Mercantile Asset Management, SVM Asset Management and Saracen Fund Managers. It specialises in long-only equities and offers a range of UK, Indian and Global strategies.
The deal will add £2.7 billion in assets under management to Liontrust’s existing £21.7 billion, taking the combined group’s pro forma total to £24.4 billion.
Diversification & distribution
Ions said the deal marks ‘an important step forward’ for his charge by diversifying Liontrust’s investment products, performance and client base.
‘River Global fund managers will benefit from Liontrust’s brand and distribution that will provide them with a broader route to market both in the UK and internationally’, he explained.
The acquisition will add further investment talent to Liontrust and bring some top-performing open-ended funds into the fold. The deal also expands Liontrust’s range of investment trusts, bringing the India Capital Growth Fund (IGC) and the George Ensor-steered River UK Micro Cap (RMMC) into a stable that already includes UK equity income trust Edinburgh (EDIN).
The transaction excludes River Global’s stake in the Parmenion fund platform business. Once the acquisition completes, River Global’s executive chairman Martin Gilbert will join Liontrust’s board as a non-executive director.
Gilbert said: ‘River Global and Liontrust are two highly complementary businesses and it makes perfect sense to bring them together.’
The consideration comprises £7.6 million in new Liontrust shares, plus a contingent payment of up to £2.1 million in shares tied to the conversion of the European Opportunities Trust (EOT) mandate into an open-ended fund.
The much-needed consolidation of the asset management sector continues and this looks a sensible deal for Liontrust.
It should create more balanced growth for the active fund manager by bringing complementary investment styles in-house.
For example, while the Liontrust European Dynamic Fund (BMW30Z5) is ranked first quartile in its IA sector over one and five years, other Liontrust teams have struggled with quality and growth companies falling out of favour.
Sharesify also notes that Christopher Mills, founder and CEO of River Global shareholder Harwood Capital, has publicly backed the deal.
Read the press release here: https://www.liontrust.com/investor-relations/regulatory-news
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