Momentum Global Investment Management (MGIM) is to acquire Seneca Investment Managers in a deal that will see David Thomas step down as chief executive of the latter but stay on as a non-executive director at the combined firm.
MGIM announced on Tuesday it is buying Seneca, subject to regulatory approval, in a deal that will create an investment management firm with £4.7bn of assets under management.
Under the deal, the Seneca name will be lost but the combined business will continue to operate from Seneca’s Liverpool office and in London where MGIM’s office is located.
Thomas (pictured right, above) will step down as the top boss of Seneca after five years in the role and become a non-executive at the combined company, while MGIM CEO Ferdinand van Heerden (pictured left, above) will become CEO of the combined business.
Van Heerden told Portfolio Adviser: “I’m pleased that David stays on as a non-exec, and that for him is his preferred choice as well.”
The move sees Thomas re-join MGIM where he worked as head of UK retail between March 2013 and October 2014.
Last month, Thomas told Portfolio Adviser about the importance of a good culture at asset management firms and how power only comes through offering investors what they want.
“Our fortunes as asset managers are in our own hands and, if we can produce attractive products, returns and service for advisers and their clients, that is what gives us our seat at the table,” he said.
Van Heerden said MGIM wasn’t actively looking for an acquisition target but the opportunity to accelerate its growth among the UK adviser market through the synergies offered by a deal with Seneca was too good to turn down.
He said because the two firms complement rather than overlap each other, there are to be no job losses as a result of the deal.
“When we looked at it from an MGIM perspective and also a Seneca perspective, the fit between the businesses is excellent in many respects; in investment style and approach, and in culture and client servicing,” he said.
“So, I think the fit was great and the synergies that we can get from combining the solutions to be a better proposition for IFAs is fantastic – and that’s why there are no staff redundancies.”
The transaction will combine the VT Seneca Funds and the Seneca Global Income & Growth Trust plc with MGIM’s three Focus funds and its range of seven managed model portfolios.
The firms’ two fund ranges have different authorised corporate directors but they will be consolidated under the MGIM brand, at which point the firm will offer UK, Luxembourg and Guernsey-domiciled products.
In a press release, Thomas said: “MGIM is a partner that shares our ideals and outcome-based approach to investment: the fit is therefore very compelling and enables us to provide continuity and enhanced service to our clients, partners and investors.
“This deal adds value to all parties: it builds scale while maintaining the nimbleness and dynamism of a boutique; it strengthens the investment team; and it creates a comprehensive range of multi-asset funds and model portfolios, alongside our flagship investment trust client.”
MGIM was established in 1998 and has about £4bn in AUM. It is a wholly-owned subsidiary of South African insurance and investment business, Momentum Metropolitan Holdings, which is listed on the Johannesburg Stock Exchange.
Seneca was founded in 2002 and has more than £600m under management across its multi-asset value strategies.
See also: David Thomas: ‘Advisers do have a degree of power over fund managers’
