Liontrust has agreed to purchase Majedie Asset Management in a deal worth up to £120m, with Majedie's CEO Rob Harris (pictured) set to join the firm as head of global institutional business.
The acquisition - which will be for an initial consideration of £80m including regulatory capital, plus up to £40m for excess NAV - will boost Liontrust's assets under management by £5.8bn to more than £42.3bn and significantly increase its institutional capabilities, according to the firm.
Majedie Fund Management will remain unchanged under CIO and chair James de Uphaugh, though it will be renamed the Liontrust Global Fundamental team.
Liontrust's share price reacted positively to the news, having risen by 2.25 in the first 20 minutes of trading.
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John Ions, CEO of Liontrust, said: "Liontrust has been increasing its number of institutional clients and the purchase of Majedie will hasten this expansion by enhancing our investment capability and client service credentials.
"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.
"This is demonstrated by the quality of Majedie's institutional mandates and the fact they were appointed by The Edinburgh investment trust in 2020."
He added that Majedie "has strong client relationships that have been built up over many years" and an "impressive quality of client service".
"Given the growing demand from institutional investors for global equity managers, we believe we can expand this client base further for the Majedie investment team, as well as take advantage of Majedie's institutional expertise," Ions said.
Majedie CEO Harris said this is "an exciting day for everyone at Majedie and for our clients".
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"We have worked hard to build an enviable performance track record spanning almost 20 years, and the acquisition by Liontrust provides a compelling strategic and cultural fit, with a deeply ingrained focus by both firms on rigorous investment processes, a commitment to responsible capitalism and first-class client service," he explained.
"Our strength in the institutional market, combined with Liontrust's impressive sales and marketing capabilities, will enhance distribution for our investment team and offer a resilient, long-term proposition for our clients.
"It was very important that our existing clients would be unaffected through the management of their investments and the service they receive. This is being delivered, with no changes to the Majedie investment team who will continue managing accounts and funds to the same investment process as before the acquisition."
Ryan Hughes, head of investment research at AJ Bell, said Liontrust's purchase of Majedie Asset Management is a "surprise", given it is not a name "regularly touted as a takeover target" given its owner-managed structure and "strong independence".
"Liontrust has proven to have an excellent ability to integrate purchases into their existing structure with the process well refined have integrated Neptune and Architas in the past two years," he explained.
"The fund ranges of the two companies look a decent fit, however there is the chance of some consolidation of the enlarged fund range, not least because Liontrust will have 19 funds that each have less than £100m in assets as they still look to tidy up the assets from their previous purchases."
He added that, for investors in Majedie funds, the deal "does not look like it needs to give any immediate cause for concern" as all of the fund managers are moving across 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," Hughes said.
