Liontrust’s acquisition of the UK division of multi-manager firm Architas provides John Husselbee with the asset base to match his profile as he prepares to become head of the merged outfit later this year.
Liontrust announced the £75m acquisition on Wednesday morning, which will see its multi-manager range jump from £1bn assets under management to £6.6bn. A share placing this morning raised £66.17m for the deal.
Architas’s funds will be renamed under the Liontrust brand with Husselbee (pictured) becoming head of the enlarged multi-asset unit while Sheldon Macdonald, who is from the Architas side, will become deputy head of multi-asset.
Following the acquisition, which is due to complete before the end of the year, Liontrust assets will be £25bn. Its shares were up 3.45% by mid-morning.
> See also: John Ions welcomes more scrutiny as Liontrust joins FTSE 250
‘For whatever reason the asset base at Liontrust has been reasonably small’
Fairview Investing consultant Ben Yearsley said the acquisition gives Husselbee a “nice mix” of passive, active and alternative multi-asset funds to oversee.
“He’s got the profile but not the assets. He’s well known in the industry, well thought of, but for whatever reason the asset base at Liontrust has been reasonably small.”
Yearsley added that it would be good for Liontrust to diversify away from Anthony Cross and the economic advantage team where traditionally a lot of their AUM has been concentrated. Concerns have previously been raised about key man risk in Cross’s team, which had assets of £7.7bn at the start of the year.
Nevertheless, Yearsley thought the Architas acquisition had more risk involved than the Neptune deal, which was first announced in July 2019.
“Because they bought Neptune, they bought Robin Geffen, James Dowey and that team and basically left them alone,” he says. “The Architas deal has more risk because Huss is taking over an existing team so there’s more chance of personality clash.”
> See also: ‘Tainted’ Neptune name dropped in Liontrust acquisition
Axa-owned business says timing was right to divest from the UK
Reports Architas, which is owned by Axa, was looking to offload its UK business first circulated in May with a Bloomberg report stating the French insurer was looking to offload non-core operations and less profitable parts of the business.
“I wouldn’t say they’ve been the most visible of brands while owned by Axa,” said Yearsley. “From that point of view, it’s probably positive for them and their funds to be part of a much more focused asset management business.”
Liontrust chief executive John Ions emphasised the deal would expand the asset manager’s distribution through advisers as investment solutions grow in popularity.
In a press release, Architas CEO Matthieu Andre said Liontrust was a suitable strategic and cultural fit in part due to its UK focus.
“Outside of the UK, Architas has grown exponentially to become a global business focused on supporting Axa entities and their partners across Europe and Asia relying on state of the art multi-asset and multi-management capabilities.
“We have decided to leverage this growth and to focus on our core strength and scale and to divest from running an independent regulated investment business in the UK.
“Architas has ambitious global growth plans aligned with the ones of the Axa Group and will continue to operate outside of the UK, wherever we have a strong Axa life and savings presence.”
Architas launched its UK business 10 years ago.
> See also: Architas unveils expanded Dublin team ahead of Brexit
