AssetCo has reached an agreement to acquire Edinburgh-based SVM Asset Management for a total consideration of £10.7m, marking its sixth purchase since Martin Gilbert took the chair last year.
Founded in 1990 by Margaret Lawson (pictured) and Colin McLean, the fund manager holds £586m in assets under management across five open-ended funds and an investment trust.
Subject to completion, AssetCo will purchase the group through the issue of up to £9m of 1% fixed rate unsecured convertible loan notes in itself, plus a further £1.7m in cash, to be paid on completion.
The notes may be converted into ordinary shares in AssetCo at an effective issue price of £14.50, or will be repaid on 31 December 2023.
Gilbert, along with deputy chair Peter McKellar, and listed equity platform River and Mercantile CEO Alex Hoctor-Duncan, will join the board of SVM on completion.
McLean will become a director of AssetCo's Scottish business, while Lawson will continue in her role as manager, as will global and UK investment director Neil Veitch and European investment manager Hugh Cuthbert.
The purchase will bring AssetCo's listed equity fund AUM to £3.5bn, and the firm has cited "significant opportunities to enhance the distribution and marketing of SVM's existing funds", adding it would broaden the product offering.
SVM will also "spearhead" AssetCo's Edinburgh asset management hub, as this acquisition brings the Scottish AUM to £800m.
Gilbert said he was "immensely proud" to be building this hub and described SVM as a "well-regarded fund management firm with a recognised investment style and a very strong investment track record".
McLean added: "When I set up SVM our aim was to leverage quality research and strong fundamentals to underpin our independent thinking and deliver great investor value. I believe that our performance over the years demonstrates that we have been able to achieve this.
"I am pleased that with the backing of AssetCo we will be able to continue to build our focus on, and relationships with, existing clients, creating greater value for them, whilst also broadening our client base and growing assets."