The agreement, announced yesterday by BPCE — Natixis IM’s parent company — and Generali, will see the launch of an asset manager with €1.9trn (£1.6trn) assets under management.

The parent companies will own 50% each of the combined business, with balanced governance and control rights.

PA Events: PA Live: A World Of Higher Inflation 2025

BPCE CEO Nicolas Namias will chair the board of the new entity, with Generali CEO Philippe Donnet as vice chair.

Meanwhile, current Generali Investments Holding CIO Woody Bradford would serve as CEO, with Natixis IM CEO Philippe Setbon as deputy CEO.

Subject to regulatory approval, the merger is expected to complete by early 2026.

Both parties cited critical scale, an enhanced offering in private assets to meet growing demand, and strengthened global distribution capabilities as some of the factors behind the deal.

See also: BlackRock enters pact with Saba to ‘not seek to control or influence the board’

In a quarterly funds under management update, the firm announced that they would not seek to raise any funds or offer any new shares with the move, which it expects to complete by the end of March.

CEO Andrea Montague (pictured) said the move would extend the opportunity to own the group’s ordinary shares to a broader group of investors.

Brooks Macdonald was founded in 1991 and listed on the AIM in 2005.

See also: Finsbury holds faith in Diageo and Fever-Tree despite drops

For the quarter to 31 December, the wealth manager’s FUM held steady at £17.9bn — the same level as the previous quarter.

The firm posted its strongest quarter for gross inflows for 18 months at £579m. Brooks suffered £151m net outflows in the quarter, however, though its MPS platform business gained £146m net inflows.

Investment performance contributed £200m towards total FUM.

Andrea Montague (pictured), CEO of Brooks Macdonald said: “This is Brooks Macdonald’s strongest quarter of gross inflows for 18 months, driven by the quality of our service, the scope of products tailored to meet clients’ needs, and our strong investment performance.

“While outflows remained elevated in the quarter, we are taking actions to improve asset retention as well as driving new business growth. Additionally, we continue to scale and enhance our financial planning expertise, including most recently through the acquisitions of LIFT, Lucas Fettes and CST Wealth Management.

“We remain focused on the execution of our strategy to reignite growth, serving our clients well, reaching more clients, and delivering value for our clients, shareholders and employees.”

Earlier this year, De Jager, an independent adviser and former CEO of SW Mitchell Capital, published a white paper on behalf of the Independent Investment Management Initiative (IIMI), entitled Exploring our corporate structures: plan for the worst, even in the good times.

The research was partially prompted by the downfall of Odey Asset Management in 2022, which the paper states “brought to light several abuses of the governance structure in the firm – an LLP named after its founder, and closed due to severe allegations related to him”. “While we do not condone any abuse of power, in any structure, it is a sad truth that bad actors may be able to manipulate the structures within which they operate,” it says.

When the paper was first published, IIMI, which today comprises 50 member boutique and specialist firms, found 67% of its constituents operated as private limited companies. The remaining 33% operated as limited liability partnerships, although one of these PLCs – Evenlode Investment – is an employee ownership trust (EOT).

Practice playbook

Speaking to Portfolio Adviser, De Jager says corporate structure is “a sensitive subject”. “It often leads to people talking about succession and due diligence. It’s really hard to set up an event on this topic, because people want to have these conversations one on one and not necessarily in an open forum.

“The precipitation for this [white paper] came because suddenly there was a negative example of a governance failing. We felt that, rather than this be a subject we discuss privately within IIMI, it was important to put out a type of practice playbook.

“Most of our members have good protections in place, but the purpose of the paper is to flag that it isn’t a case of ‘one size fits all’.”

IIMI CEO Hristova says that, within a broader context, IIMI recently joined City Hive’s ACT Alliance – the corporate culture standard for investment companies – so culture and values are “at the forefront of the conversations [IIMI is] having from a boutique perspective”.

Read the rest of this article in the November issue of Portfolio Adviser magazine

The article stated that an initial joint venture between the two firms has been discussed, as well as a full acquisition by Amundi.

AllianzGI currently has €550bn in assets under management, according to its website, while Amundi’s assets stood at €2.2trn as of 30 June 2024.

Rumours surrounding a proposed combination began more than a month ago, according to a Reuters article published at the end of October, with the German insurer seeking to grow the asset management arm of its business.   

A spokesperson from Amundi declined to comment.

Amundi, which has grown through numerous acquisitions over the years, also agreed to purchase Alpha Associates in February this year. The asset manager, based in Zurich, provides private market, multi-manager solutions to investors.

The trust’s share price has managed to increase by 2.7% over the last six months to the end of September. However, its NAV total return is down 1.9% over the period, with the company’s NAV per share falling from £1,026.43 to £955.83. This marks a 3.8 percentage-point underperformance compared to its MSCI World index benchmark’s gain of 2.7%.

Robert Lambert, chair of Lindsell Train investment trust, said the past six months have been “characterised by the steady fall in the valuation of LTL”, the trust’s investment manager. Lindsell Train IT has a 29.9% weighting to the unlisted firm as at the end of October 2024, offering investors a way to access exposure to the company, alongside smaller allocations to shares in 13 other listed names including the London Stock Exchange, Nintendo and RELX.  

According to Lambert, Lindsell Train’s valuation has fallen by 8.4% over six months to the end of September 2024, and has proved to be “the biggest detrimental contributor to the company’s performance”. Over six months to the end of September, the trust’s portfolio allocation to its investment manager fell from 34% to 31%, reflecting a reduction in LTL’s funds under management.

“LTL’s strategies have suffered from disappointing relative performance in recent years and some of its clients have understandably responded by withdrawing funds, with LTL’s FUM falling from £15.2bn to £13.4bn over the six months to 30 September 2024,” Lambert said. “A good proportion of clients, including the company, have experienced LTL’s successful longer-term performance and remain loyal supporters of its differentiated investment approach which, as the investment manager’s report implies, remains consistent with its core principles.”

Outflows from clients have impacted negatively LTL’s revenues, although profit margins have remained above 60%. However, if funds under management fall below £11bn, margin protection given by LTL’s salary and bonus cap of 26% of revenue “may be compromised”, according to the trust’s chair.

He added that LTL dividends paid in June fell by 16% compared to the same period last year, and by 7% compared to its December pay-out.

“Declining LTL dividends will impact the company’s ability to maintain its dividend at the same level in 2025 without using revenue reserves to do so,” Lambert warned.

“While the decline in LTL’s FUM is disappointing, the board takes some comfort from LTL’s financial strength, which gives LTL the option to invest behind its business if necessary. LTL’s half-year financial review shows that LTL has cash resources of £105m at 30 September 2024.”

Despite LTL’s performance, the chair added that other holdings in the portfolio have performed well, with Unilever returning 23.7% and London Stock Exchange gaining 9.1%.

That being said, Lindsell Train investment trust’s discount to net asset value, which currently stands at 25.7% according to AIC data, “is a source of concern” for the board.

“It reflects, to varying degrees, LTL’s and the company’s disappointing investment performance, the continued and prospective decline in the valuation of LTL, its largest investment, the succession risk at LTL and the general level of discounts in the investment trust industry,” Lambert continued. “The board thinks that resorting to share repurchases to reduce the discount would prove ineffective and believes its buyback powers are better deployed to take advantage of a discernible opportunity to add value for remaining shareholders should one materialise.

“Any opportunity has to be balanced with the need to fund a share repurchase with a sale of existing quoted investments, the consequence of an increase in LTL’s percentage weighting within the company investment portfolio and the burden of an increased expense ratio for remaining shareholders.”

He added that the board believes the “surest way to improve the company’s rating is for LTL to generate better relative and absolute performance for the company and for broader LTL funds”.

“The board has every confidence that this will happen and is doing everything in its power to the provide the support necessary to LTL to ensure that outcome.”

Bank J. Safra Sarasin, which currently offers thematic equity strategies to private and institutional investors, said the purchase of the firm – including its flagship MIV Global Medtech fund – highlights its “commitment to growth in asset management with its thematic equity investing capabilities”.

MIV’s investment strategy and organisational structure will remain unchanged. Financial terms of the transaction are not disclosed.

Oliver Cartade, head of asset management and institutional clients division at Bank J. Safra Sarasin, said: “We are thrilled to welcome MIV Asset Management into the J. Safra Sarasin Group. This acquisition aligns perfectly with our strategic vision to strengthen our thematic equity offerings and underscores our commitment to providing clients with unparalleled investment opportunities.

“MIV’s exceptional team and proven track record will be instrumental in driving our growth and innovation in the thematic investing space.”

Christoph Gubler, senior portfolio manager and CEO of MIV Asset Management, added that the firm is “excited to become part of the J. Safra Sarasin Group to ensure the long-term success of our investment strategy in the best interest of investors”.

“We look forward to continuing our success story as part of the J. Safra Sarasin Group,” he said.

Assets under management remained largely unchanged at £37.2bn, compared to £37.4bn during the previous year. This represents a positive contribution of £5.3bn from investment performance, as well as £312m following the firm’s acquisition of Absalon Corporate Credit.

These positive contributions were offset by outflows during what CEO Ian Simm described as a “challenging year” for active asset managers; these predominantly came from Impax’s European wholesale channels during the first three financial quarters of the year.

See also: Impax Environmental Markets receives Sustainability Impact label

Impax’s aggregate AUM should increase by £1.3bn during the next set of results, with the business set to close on its acquisition of SKY Harbor Capital Management – another fixed income business – at the end of the calendar year.

From an operational perspective, revenue fell by 4.7% from £178.4m to £170.1m year-on-year, while adjusted operating profit shrank by 9.3% to £52.7m, compared to £58.1m in 2023.

Impax’s adjusted operating margin ticked down slightly from 32.6% to 31%, while cash reserves grew slightly from £87.7m to £90.8m.

CEO Simm (pictured) said: “This was a year of positioning the business for further growth, not least through the acquisition of further fixed income capability, diversification of our distribution channels, product development and through increased focus on client service, including additional reporting and thought leadership.”

He added that he is “encouraged by Impax’s prospects” and believes the macroeconomic environment is “supportive” for the business’s strategies.

See also: View from the top with Impax AM’s Ian Simm: Follow your heart

“Expectations of a ‘soft landing’ for the US economy should underpin improved investor confidence, while stable risk sentiment should lead investors to look beyond the narrow range of stocks (including those in artificial intelligence and obesity drugs) that have driven the performance of global indices for much of the past 18 months.

“Experience from the first Trump administration suggests that the next four years are likely to be positive for US-based businesses delivering innovative products and services and in which materials and energy efficiency are significant contributors. Against this backdrop, we are confident that our investment portfolios can deliver excellent returns for clients.”

On Monday (25 November), the Apax XI fund – a global buy-out fund which AGA is a limited partner of – reached an agreement to acquire the business. The purchase, which remains subject to “customary closing conditions”, will see the company subsidiary become a standalone UK accountancy business rebranded as S&W.

See also: Apax Global Alpha to invest £24.4m as part of Veriforce acquisition

According to the announcement, Apax sees the mid-market accountancy and advisory space as “the ideal place to invest as increased regulation and conflicts make the Big Four less competitive in servicing the mid-market”.

“Within this market, Apax viewed S&W as the ideal UK platform to back because of its brand heritage, high quality service offering, deep talent pool and it has demonstrated a track record of growth,” the firm said.

Apax added it aims to “support the newly-branded S&W on its growth journey”, hoping to “cement its place as a leader in the mid-market space”.

“There is an opportunity to improve its already strong client offering through new go to market strategies, cross-selling and further investment in technology,” it continued. “There is also a meaningful opportunity to unlock strategic M&A in what is a fragmented market.”

Around 25 roles will be affected, the firm announced in its half-year results this morning (21 November),

Liontrust’s profits fell in the half-year to 30 September, in what CEO John Ions (pictured) described as a ‘challenging period’ for active managers.

The firm’s gross profit for the six-month period stood at £81.1m, down from £98.6m at the same point of last year.

Adjusted profit before tax was £25.8m, down from £36m in 2023.

See also: Edinburgh Worldwide to undergo restructure following poor performance

Assets under management and advice fell £800m in the three months to the end of September, dropping to £25.2bn from £26bn.

Liontrust John Ions, CEO, said: “The last six months have continued the challenging period for active managers including Liontrust. There are a number of reasons, however, why we are confident that we are moving into a more positive environment and the outlook is improving.

“We are steadfast in our commitment to active management and to our partnership with clients through complementing their other strategies including passive investments.

“The headwinds facing many of our investment strategies are now being replaced by tailwinds including lower inflation and interest rates. We are seeing improved performance across our funds and we continue to have a strong brand and client engagement.”

He added that the firm’s confidence is reflected in its share buyback scheme of up to £5m, to be carried out over the next four months.

Liontrust is also targeting a dividend of at least 72p per share for the end of the financial year on 31 March.

Funds

In terms of fund performance, 68% of Liontrust’s strategies were in the top two quartiles of their respective sectors over one year.

Liontrust also announced it will integrate its global fixed income team into its multi-asset division, effective at the start of 2025.

As part of the integration, the fixed income portion of the Liontrust multi-asset funds and portfolios, around £1.4bn in assets, will move from external investment managers to be managed by in house.

See also: Ninety One acquires Sanlam Investment Management

Norman-Butler spent 15 years at Montanaro Asset Management before exiting in September.

Beechtree Capital is an outsourced distribution business focused on the UK and Ireland.

See also: Jupiter hires GAM European equity trio

In a LinkedIn post, he said: “I believe the outsourced model makes more sense now than ever before. With fees for active management continuing to fall, new entrants to this market must keep costs under control and raise assets in order to survive.

“Outsourcing ensures up-front costs are kept low and there is a better alignment of interests as well. For more established firms looking to raise assets in our home market for the first time, the outsourced model provides increased flexibility and specialist local knowledge.”

He added that his firm will aim to build long term partnerships with a “select few” active managers, and will typically look for specialists with a differentiated and proven investment approach.

As part of the deal, Sanlam’s £17bn of assets under management will fall under the control of Ninety One when the transaction is finalised in March next year.

It will also take over management of Sanlam Investments UK, though this branch of the business will remain under the ownership of Sanlam Group.

In turn, Sanlam will take a 12.3% stake in Ninety One’s shares.

See also: PwC: 81% of wealth managers are eyeing up consolidation or M&A

Both firms were founded in South Africa, and it is hoped this new deal will allow the companies to solidify their position in the region.

Ninety one said the deal would “expand its market reach” into “savings pools outside the normal reach of the Ninety One,” while also allowing it to “accelerate the expansion of its international private credit offerings”.

Hendrik du Toit, founder and CEO of the firm, said: “This agreement will give us the opportunity, as leaders in our respective markets, to create additional value for our stakeholders. We are making a substantial investment in the future of South Africa.”

The outflows were mostly driven by £1.3bn net redemptions from internal assets, including the expected £5.1bn run-off from the firm’s Heritage portfolio.

A further £1bn outflows came due to strategic actions from clients previously part of Aviva.

External net flows were positive at £600m, which was attributed to strong performance in multi-asset and fixed income.

See also: Tatton Asset Management sees organic inflows rise by 101% in half-year results

Meanwhile, assets under management ticked up 2% to £238bn, primarily reflecting the impact of market movements and strong flows into the firm’s Liquidity strategies.

Aviva’s wealth arm recorded £7.7bn net flows, up from £6.4bn in the same period of last year. Platform flows were up 76% on the previous year, hitting £3.1bn

Group CEO Amanda Blanc said the flows in the firm’s wealth arm reflected continued growth in workplace pensions and strong demand from Aviva’s financial adviser platform business.