Liontrust Asset Management has purchased rival fund group Majedie Asset Management for £80m, although the deal could reach £120m with an additional £40m set aside for excess NAV and deferred consideration.
The acquisition will bring £5.8bn worth of new assets into Liontrust’s control, increasing the firm’s total asset under management (AUM) to £42.3bn.
All Majedie funds will be renamed to become part of the Liontrust brand, but the management team and structure is expected to stay the same. Rob Harris, current chief executive officer at Majedie will join the Liontrust board as head of global institutional business.
Harris said that there would be no changes to the Majedie investment teams and that the portfolios would continue to be run with the same process as before the merger.
“It was very important that our existing clients would be unaffected through the management of their investments and the service they receive,” he said.
However, Ryan Hughes, head of investment research at AJ Bell, said: “For investors in Majedie funds, this deal doesn’t look like it needs to give any immediate cause for concern as all of the fund managers are moving across and continue to manage the same funds. Whether that remains the case further down the line remains to be seen, but for now, continuity is the order of the day.”
The £1.1bn Edinburgh Investment Trust run by James de Uphaugh and Chris Field is the largest portfolio Liontrust is set to inherit from Majedie.
The fund underperfomed the FTSE All Share benchmark for several years whilst under the management of Mark Barnett, then of Invesco, but has recovered since it was switched to Majedie.
Indeed, portfolio has returned 11.3% since it was moved from Invesco to Majedie, 7 percentage points ahead of the benchmark index.
Total return of fund vs benchmark since manager start
Source: FE Analytics
Two other notable funds run by Majedie are the UK Equity (£950m) and UK Focus (£520m) portfolios.
The latest acquisition is the third move Liontrust has made in recent years, having previously acquired Neptune Investment Management for £40m in October 2019 and Architas UK Investment Business for £75m in November 2020.
Hughes said: “The purchase of Majedie is a surprise as it was not a name regularly touted as a takeover target given its owner-managed structure and strong independence but the ability to tap into Liontrust’s wider resource and hopefully grow the assets was clearly a strong pull.”
John Ions, chief executive at Liontrust said: “We have been very impressed by the Majedie investment team. They are an experienced team with a robust investment process that is reflected in their excellent long-term performance.”