Martin Gilbert makes an attempt to woo buyers for AssetCo plan | USAEMALL.com

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City veteran Martin Gilbert is trying to attract investor support for AssetCo, as he attempts to turn around the lossmaking asset-management acquisition business.

Gilbert, AssetCo’s executive chair, has met prospective investors — including other fund managers — in recent weeks as well as existing shareholders to explain plans to split the Aim-listed company’s shares, according to three people close to the situation.

He took over AssetCo in 2021 to acquire small asset managers and take advantage of consolidation in the mutual-fund industry, as the market battles against customers withdrawing their money in favour of cheaper index tracker funds.

But AssetCo has also struggled with outflows, high costs and operating losses. The company said in June it had taken action to reduce costs, which has helped to shrink its losses.

In an attempt to bolster the value of the business, the company is aiming to split its shares so that investors will be given separate unlisted stock in Parmenion, an investment site for advisers. The remainder of the asset management business will remain quoted and will be rebranded River Global.

Gilbert told the Financial Times: “The splitting of shares is designed to try to solve the issue of the sum of the parts not reflecting what we think is the true value of the company. That will allow shareholders to hold whichever share they want in the business.”

He said his recent meetings were part of his role as chair of a public company in which “a large part of your time is spent dealing with external stakeholders”.

But analysts at Deutsche Numis warned that hiving off Parmenion shares could “close off a potentially important funding source” to the remaining River Global business. They noted that River Global “needs new capital” to acquire other asset managers and turn a profit.

The analysts said they valued the River Global asset management business at zero while valuing AssetCo’s stake in Parmenion at £68mn. AssetCo’s market cap is £54mn.

Gilbert said he hoped “to prove [the analysts] wrong”.

AssetCo’s largest shareholders include Harwood Capital, which is led by Chris Mills, the co-founder of J O Hambro Capital Management. Gilbert has a stake, while Toscafund, which Gilbert chairs, is also a top shareholder.

Gilbert made his name as a dealmaker in the City during his time at Aberdeen, the asset manager he co-founded in 1983. He said in June that AssetCo was on a “journey towards profitability and cash generation” after the company merged its equity businesses, sold off lossmaking divisions and generated cost savings.

AssetCo’s acquisitions include asset manager River & Mercantile for just under £100mn in 2022, and the boutiques Revera and Saracen. It also bought Rize ETF but sold it to Cathie Wood’s Ark Invest at a loss.