Martin Gilbert has sparked more speculation about the nature of his planned deal making venture with responsible investment specialist Alquity revealing the Aberdeen Asset Management founder is among the investors involved in its latest capital raise.
The capital raise and a strategic partnership with East Capital are part of an initiative for the fund house to target over $3bn (£2.2bn) assets under management and 10x growth in revenues within the next five years, Alquity said in a press release published Thursday.
In a statement, Gilbert said: “I have known the Alquity team for many years – they are tried and tested.
“There’s no doubt their expertise on the connection between listed equities, high quality ESG and impact is going to become even more significant over the next 10 years – for investors and for the industry.”
A number of Gilbert’s former employees from his Aberdeen Asset Management days hold senior roles at Alquity, including its chief executive Brad Crombie, who used to be global head of fixed income at the Scottish asset management giant.
Additionally, Alquity sales director Alex Boggis and its director of North American sales Renee Arnold are both former long-serving Aberdeen Asset Management employees, having served as head of Hong Kong and head of business development for Canada respectively.
‘Clearly there are deals to be done this year’
This week it was revealed that Gilbert and a group of investors, including former Aberdeen Standard Investments global head of private markets Peter McKellar and Toscafund Asset Management, were planning to transform Assetco from an operating business into a corporate vehicle for dealmaking in asset management and financial services.
Assetco, a cash-rich company currently focused on fire engine leasing in the Middle East, acquired a 2.9% stake in River & Mercantile on Friday. Assetco said at the time that shareholders should be prepared for “further similar corporate activity”.
Fairview Investing consultant Ben Yearsley thought Alquity’s capital raise was interesting in light of the Assetco news earlier in the week.
“Clearly there are deals to be done this year and deals where there are businesses that are sub-scale. It’s very hard for a small fund management business with distribution, compliance costs, the whole lot. You look at Polar gobbling up Dalton, which is a £1.2bn firm and even that is possibly too small.”
Polar Capital revealed its £15.6m purchase of the European equity specialist in December last year.
Yearsley did not know what Gilbert’s ultimate plans for Assetco would be but suspected most deals would involve private companies, arguing that listed fund boutiques get snapped up quickly. “Stitching them together will be the hard part. You can’t just buy this and that and expect them to fit together and work well.”
See also: River & Mercantile soars as Martin Gilbert prepares for dealmaking comeback
Alquity’s strategic partnership with East Capital
East Capital will take a 10% stake in Alquity as part of its strategic partnership with the firm.
The companies will cooperate on business development and distribution in some European markets, as well as on fund operations.
East Capital Asset Management SA in Luxembourg will also act as as Alquity’s management company on administration and custody services.
In a statement, Alquity founder and chairman Paul Robinson said: “Megatrends in ESG and impact such as decarbonisation, gender equality and the circular economy, coupled with structural growth and booming demographics in emerging markets will shape the next 10 years towards the Sustainable Development Goals.
“Investors will no longer accept short-term alpha if it compromises long-term beta. We all believe that now is the right time to seize this moment to scale through our differentiated offer.”
See also: Martin Gilbert adds River and Mercantile board position to growing portfolio of roles
