M&A a focus for £3bn real assets fund house
Gravis Capital chief executive Phillip Kent is hoping to grow his firm via a series of mergers in the investment trust world and acquisitions of rival managers, he told FT Adviser.
Gravis has £3bn of assets under management, split across two investment trusts and four open ended funds, with all of the products focused on areas such as infrastructure, property and environmental assets.
In 2023, Gravis attempted to merge two of its investment trusts, and while this transaction did not ultimately proceed, Kent said the work the company did on this showed it the benefit of consolidation.
He added: “There are so many trusts in the battery storage and renewable energy space, each with the costs of its own board of directors and auditors to pay, so a merger immediately delivers cost benefits to shareholders in the trust.
“But also, there is a trend among wealth managers merging, which means they run larger pots of money and have larger minimum investment amounts, so investment trusts merging makes it easier for the wealth managers to buy them.”
The investment trust universe has seen a sharp rise in the number of trusts merging in recent years, particularly since the start of 2021, as volatile market conditions have impacted the size of many of those vehicles.
Additional to his plan to merge with investment trusts presently managed by other asset managers, Kent is also pondering the acquisition of rival fund houses.
He said: “The way the asset management industry is going, you have to be either very specialised or very big.
“In the infrastructure space, there have been lots of acquisitions in recent years, BlackRock and Schroders recently bought specialist firms in this area.
“Our focus is on potentially acquiring firms that have complementary skill sets to those we have, rather than firms that take us away from what we do, so the focus is on the same sector and asset classes.
“What we could add would be a greater exposure to institutional investors, because our client base right now is private clients and advised clients, so a greater diversity of client base is a target.”
david.thorpe@ft.com
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