Polar Capital has agreed to buy Dalton Capital, the parent company of £1.2bn European equities boutique, Dalton Strategic Partnership.
The deal is for a total of £15.6m, comprising an initial payment by Polar of £8.3m, split between £7.8m cash and £500,000 in Polar shares, and a deferred cash payment of £7.3m to be paid 12 months after completion.
Dalton Strategic Partnership is a London-based European equities specialist. It runs the £1.12bn Melchior European Opportunities fund and related segregated accounts, managed by David Robinson, as well as £120m of European long/short funds, managed by Leonard Charlton, and three smaller global and Asian funds, run by Nick Mottram.
In an RNS announcement, Polar said the acquisition held “strong strategic rationale” as part of its growth and diversification strategy, especially into Europe.
Polar Capital chief executive Gavin Rochussen (pictured) said the acquisition delivers “greater scale, new capabilities and an expanded distribution reach in Europe, as well as highly experienced investment teams with a good track record”.
“This acquisition will also provide Polar Capital with its first Luxembourg Sicav,” he added. “We are confident that the acquisition will be immediately earnings enhancing and look forward to welcoming the DSP team and clients to Polar.”
In February, Polar acquired the value-focused equity team of Los Angeles-based boutique, First Pacific Advisors. It was described at the time as a “slow burn asset raise” as the fund group looks to push into the US market.
Dalton CEO Nick Mottram said: “We have long been impressed by Polar Capital’s strong client focus, proposition and growth aspirations and are delighted to be joining the group.
“It is a good cultural fit for us and that was important when we were looking to join a larger group, as we wanted to ensure we retained investment autonomy over our funds, something that our founding partner, Andrew Dalton, believed in fundamentally when he started the firm back in 2002.”
The costs of the transaction are expected to be £6.2m, including termination and reorganisation costs.
The deal, subject to FCA approval, is expected to complete in Q1 2021.
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