River & Mercantile has soared 17% as its new vice chairman Martin Gilbert prepares to make a comeback to asset management dealmaking with the backing of former Aberdeen Standard Investments colleagues.
A regulatory filing on Monday morning confirmed Gilbert was among a group of investors that had acquired a 29.8% stake in Assetco. Gilbert’s stake represented 9.9%, while former Aberdeen Standard Investments global head of private markets Peter McKellar had purchased a 3.4% stake. Toscafund Asset Management had acquired a 12.2% stake.
Gilbert reportedly intends to use to the company as a vehicle for dealmaking in the financial services sector.
On Friday, the business announced it had acquired 2.9% of River & Mercantile at £1.86 a share, a premium of 1.2% of the closing price on 7 January. The £4.7m deal was announced just two days after Gilbert was revealed as the new vice chairman of River & Mercantile.
“Shareholders should be aware that there is the potential that further similar corporate activity or changes of strategy may result in a fundamental change to the company’s business, board or voting control, including the potential to transition from an operating company to an investing company,” Assetco said in an RNS announcing the River & Mercantile purchase.
The asset manager was trading at £2.31 a share on news of Gilbert’s plans for Assetco and was the top-performing stock in the FTSE All Share on Monday morning.
Although Assetco has been focussed on fire engine leasing in the Middle East, business has slowed due to coronavirus lockdown and travel restrictions.
It is also sitting on a sizeable amount of cash due to a payout from its former auditor Grant Thornton following litigation. Prior to the River & Mercantile investment it had cash balances of £31m.
According to Sky News, Gilbert had discussed using Assetco as a corporate vehicle for dealmaking with Christopher Mills, whose firm Harwood Capital Management is the largest shareholder in the business with a 26% stake. Gordon Neilly, Aberdeen’s former global strategy chief, is reportedly also involved.
In a statement on Monday, Gilbert said: “We believe that the next few years will see significant investment opportunities in the financial services sector as some of the pressures that the industry faces from regulation, fee pressure, technology and changing client preferences force further, and arguably a faster pace of change.”
Gilbert recently joined the board of Saranac Partners and is chairman of Toscafund and Revolut.
