finance

AssetCo buys 63% stake in Rize ETF for £16.5 million



AssetCo has agreed to purchase a 63% stake in investment firm Rize ETF for £16.5m.

It is also committing a further £5.25m investment to Rize ETF to help fund the growth of the business. It acquired the equity from J&E Davy Holdings.

The acquisition is expected to close on 27 July and is not conditional on regulatory approvals.

AssetCo has since launched a proposed placing to help raise approximately £25m for the acquisition of Rize ETF and other companies.

The non-preemptive placing of new ordinary shares is valued at 10p each in the company, at a price of 1,450 pence per share.

The total number of placing shares will represent approximately 26% of the company’s existing issued share capital.

Martin Gilbert, deputy chairman and chief executive at AssetCo, alongside Peter McKellar and Mark Butcher, non-executive directors at Harwood Capital Management and Toscafund Asset Management, intend to participate in the placing.

Following the acquisition, management and employees will own an effective 37% stake in Rize ETF, of which 5% is subject to certain near-term performance conditions.

Following completion, Gordon Neilly, an adviser to AssetCo, and Gary Collins, head of distribution at AssetCo, will join the board of Rize ETF.

Rize ETF is believed to be Europe’s first thematic exchange-traded fund (ETF) issuer and one of the fastest growing providers of ETFs.

The business was founded in 2019 by a management team with a track record in establishing and scaling ETF business, having helped build the ETF capabilities at Legal & General Investment Management.

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It currently has more than $450m of assets under management, having launched its first ETF in February 2020.

Rize ETF employs nine people and is headquartered in London. It has launched four bespoke thematic ETFs, which provide investors access to funds investing in “transformational megatrends”.

It is planning to launch a further four new funds during 2021, with the launch of environmental impact 100 ETF planned for late July.

Peter McKellar, chief executive at AssetCo, said: “Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers.

“Rize has the team, pedigree and expertise to grow significantly and to continue to deliver product innovation for investors, building a world class thematic ETF business in the process.”

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