Strategic Public Equity joint venture
Gresham House plc
("Gresham House," or the "Company")
Gresham House announces Strategic Public Equity joint venture with Aberdeen Standard Investments
Specialist alternative asset manager Gresham House (AIM: GHE) is pleased to announce that it has entered into an agreement with global asset manager Aberdeen Standard Investments ("ASI")(together, the "Parties") which proposes the formation of a 50:50 joint venture relating to Gresham House's top performing1 Strategic Public Equity ("SPE") strategy. The joint venture will establish a fund and seek to grow funds under management over time.
The Strategic Public Equity team of Gresham House was selected by ASI as a joint venture partner on the basis of its long, successful track record investing in the strategic public equity space and the opportunity that this represents for clients and prospects. For Gresham House, the joint venture represents an opportunity to focus on its core investment process while benefiting from ASI's global distribution capabilities to substantially increase assets under management.
The Parties believe that regulatory changes, such as MiFID II, have created a substantial investment opportunity at the smaller end of the quoted market where market inefficiencies and valuation dislocations exist, notably in companies with market capitalisations under £300 million.
The Parties also believe that an actively engaged investment approach, using the principles and practices of private equity, can achieve enhanced financial returns for investors. Gresham House's SPE team has substantial experience in identifying undervalued smaller companies and it is this expertise that has driven ASI's desire to form the joint venture.
In addition to the joint venture's formation, ASI has also agreed to subscribe for 1,309,598 new Ordinary Shares in Gresham House plc at 496p per Ordinary Share, which rank equally with all other shares (the "Subscription"), representing 5.0% of Gresham House's enlarged share capital as a result of the Subscription. The Subscription will be conditional on Gresham House obtaining standard shareholder authorities to issue the new Ordinary Shares at the Company's 2019 AGM, scheduled for 16 May 2019. The Directors unanimously recommend that shareholders support the joint venture by voting in favour of the standard shareholder authorities at the AGM.
The Directors believe that enabling ASI to become a significant shareholder in the Company will increasingly align the interests of both Parties in the joint venture.
Commenting on the joint venture, Chief Executive of Gresham House, Tony Dalwood said:
"Like us, ASI understands the importance of specialist alternative investment strategies. The joint venture offers Gresham House access to a powerful distribution network and an industry-leading product development capability. The Strategic Public Equity investment approach is something I have been involved with since 2003 and we are delighted to have ASI as a shareholder in the process."
Peter McKellar, Global Head of Private Markets at Aberdeen Standard Investments, commented:
"The structural changes, liquidity issues and declining research coverage amongst smaller companies provides a long-term opportunity to generate significant investment returns for our clients.
"The establishment of this joint venture is in reaction to client demand for exposure to the increasing opportunities in strategic public equity. We identified Gresham House as a compelling joint venture partner based on a belief that working with a team with their experience, depth of resource and strong track record can deliver a compelling investment opportunity for clients."
The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
- Ends -
1Data compiled by FE Trustnet and Morningstar for the year to 31 December 2018, shows the Gresham House Strategic fund outperformed all other open-ended UK smaller companies' funds, achieving total NAV total returns of 8.9%. Since inception in August 2015, GHS has outperformed its benchmark by 13.3%.
For more information contact:
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Gresham House plc Anthony Dalwood, Chief Executive John-Paul Preston, Company Secretary
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+44 (0)20 3837 6270
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Montfort Communications Olly Scott Louis Supple
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greshamhouse@montfort.london +44 (0)78 1234 5205 +44 (0)20 3770 7914 |
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Canaccord Genuity Limited - Nominated Adviser Bobbie Hilliam
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+44 (0)20 7523 8000 |
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Jefferies International Limited - Financial Adviser Paul Nicholls Max Jones Chris Binks |
+44 (0)20 7029 8000 |
About Gresham House
Gresham House plc is an AIM quoted specialist asset manager providing funds, direct investments and tailored investment solutions, including co-investment across a range of highly differentiated alternative investment strategies. Our expertise includes timber, renewable energy, housing and infrastructure, strategic public and private equity. The group aims to deliver sustainable and attractive financial returns and is committed to building long-term partnerships with clients (institutions, family offices, high-net-worth individuals, charities and endowments and private individuals) to help them achieve their financial goals.
Shareholder value creation will be driven by long-term growth in earnings as a result of increasing AUM and returns from invested capital.
www.greshamhouse.com
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