(Alliance News) - Gresham House PLC on Friday said that, on top of organic asset growth over the first half of the year, the alternative asset manager has bolstered its assets under management along with its venture capital business with the acquisition of the Mobeus venture capital trusts.
The London-based asset management and investment company reported a 19% rise in assets under management to GBP4.72 billion at June 30 from GBP3.97 billion at December 31.
"Our first half performance has been very strong, with robust AUM growth driven by organic progress and international expansion," Gresham Chief Executive Tony Dalwood said.
In the six months to June 30, Gresham turned a profit before tax of GBP6.2 million, swinging from a loss of GBP1.6 million the year before, on the back of a 43% rise in income to GBP25.4 million from GBP17.8 million.
Since June, the firm has increased its AUM with a specific focus on environmental, social & governance attractive asset classes.
In addition to this, Gresham on Friday announced the acquisition of the Mobeus VCT business. This coupled, with the other segments bringing in more assets, has brought up the pro forma AUM to GBP5.1 billion.
"We continue to see strong demand for our ESG-focused investment strategies, underpinned by our compelling investment performance. A number of our sustainability-focused funds have held successful closes since the half-year end and the acquisition of the Mobeus VCT business also brings significant scale to create a leading player in the VCT segment," Dalwood added.
The acquisition of the venture capital trust business of Mobeus Equity Partners LLP includes four listed entities: Mobeus Income & Growth VCT PLC; Mobeus Income & Growth 2 VCT PLC; Mobeus Income & Growth 4 VCT PLC; and Income & Growth VCT PLC.
Combined, the entities have an AUM of GBP369 million.
These entities have been bought for an initial consideration of GBP24.0 million, with a further consideration of up to GBP12.1 million payable over three years, dependent on the achievement of specific requirements.
The Mobeus entities said that the entire core management, investment and operational teams involved with the Mobeus VCTs will all transfer to Gresham House to form an enlarged team that will manage both the Mobeus VCTs and the Baronsmead VCTs.
"A wide-ranging multi-year agreement has been put in place between Mobeus and Gresham House to enable a smooth transition and continuity of management of the VCTs (including continuing to use the 'Mobeus' name for a period)," they said.
The sale, and consequently the change of the Mobeus VCTs' investment advisory arrangements, will take effect on or around October 1.
The Mobeus VCTs, due to strong demand, are mulling potential fundraises which will take place in the current tax year.
To fund the acquisition, Gresham has announced a placing to raise GBP40 million, split between a GBP20 million cash placing of 2.2 million shares at 910 pence each as well as a GBP20 million vendor placing of 2.2 million shares to be issued to Mobeus following the acquisition. The placing price represents a 2.2% discount to the closing price of 930p per share on Thursday.
Gresham shares were up 3.6% at 963.00p each on Friday morning in London. Mobeus I&G VCT shares sunk 2.1% to 71.00p each, Mobeus I&G VCT 2's stock fell 1.5% to 96.50p, while Mobeus I&G VCT 4 shares were 1.7% lower at 87.00p.
The remainder of the funds raised will be put towards AUM growth development projects.
The placing is being conducted through an accelerated bookbuild process and the shares are not being made available to the public.
However, Gresham has made a conditional offer for subscription via PrimaryBid for retail investors of for shares up to a value of GBP2.0 million at 910p each. The proceeds from the PrimaryBid offer will be used to fund battery storage and solar projects.
Dalwood said: "The combination of Mobeus with Gresham House's existing VCT business expands our scale and presence in the VCT segment, and our combined complementary strengths will bring what believe are considerable benefits to VCT investors."
Gresham's existing VCT business includes Baronsmead Venture Trust PLC and Baronsmead Second Venture Trust PLC.
Gresham has also announced the appointment of Sarah Ing as non-executive director. Ing is non-executive director at CMC Markets PLC, the FTSE Small Cap UK-based global provider of online retail trading.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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