Disposal of Credit Business
Embargoed until 7am on 13 April 2011
Stock Exchange Announcement
LIONTRUST ASSET MANAGEMENT PLC
Liontrust Sells Credit Team
Liontrust Asset Management PLC ("Liontrust", the "Company" or the "Group"), the specialist independent fund management group, today announces that it has entered into a conditional business purchase agreement for the sale of its credit business including its credit team (the "Disposal") to Avoca Capital Holdings ("Avoca").
The two funds that the credit team manages, the Liontrust Credit Absolute Return Fund and the Liontrust Credit Fund, with a total of £85 million in assets under management (excluding Liontrust seed money), will, subject to completion, be transferred to Avoca. At the same time, the individual members of the credit team (Simon Thorp, James Sclater, Paul Owens, Quentin Peacock and Gareth Roblin) will leave Liontrust and join Avoca. The total consideration for the Disposal will be 3.75% of the assets under management transferred, with 2% payable on completion and 1.75% payable one month later in cash. Completion is subject to applicable regulatory approvals and other customary closing conditions. The credit business represents 6% of Liontrust's total assets under management.
The credit team has a strong track record but it has a niche and specialist investment focus. The team manages two credit long/short funds that are primarily invested in the high yield part of the European market. The Disposal, and the consideration received from the Disposal, will free resources and enable Liontrust to expand its fund management capability, including through mainstream investment products and strategies.
This will enable Liontrust to build on its existing UK and European equity teams and their strong long-term performance records. There is growing demand from retail investors for developed market equities, which the Company is well positioned to take advantage of given Liontrust's fund range. Liontrust therefore believes the Disposal will be for the benefit of Liontrust, Avoca and the credit team, as well as the investors in the two funds and Liontrust shareholders.
In the financial year ended 31 March 2011, the credit business made an operating loss of approximately £0.4 million before performance fees (breakeven including performance fees), excluding central costs. Current run-rate profitability for the credit business (excluding performance fees) is an annualised operating loss of £0.1 million, excluding central costs. The credit business had gross assets of £0.7m as at 30 September 2010.
John Ions, Chief Executive of Liontrust, said: "We believe this transaction is a win-win for everyone concerned. Investors will benefit from fund management continuity and the resources of a much larger credit manager and Liontrust will free resources to expand our fund management capability.
"As we have publicly stated on a number of occasions, we are committed to growing our retail and institutional assets under management. We will do this through both marketing our existing UK and European equity funds, which have strong long-term track records, and recruiting new fund management teams. This strategy has not been changed by the sale of the credit team.
"There is no set timescale for this expansion. We will add fund management teams when the right opportunities present themselves."
For further information please contact:
Liontrust Asset Management PLC 020 7412 1700
John Ions www.liontrust.co.uk
Vinay Abrol
Simon Hildrey - Head of Marketing & Communications
Altium 020 7484 4040
Sam Fuller
Paul Chamberlain
Forward Looking Statements
This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses and plans of the Group. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that have not yet occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. As a result, the Group's actual future financial condition, results of operations and business and plans may differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements. Liontrust undertakes no obligation publicly to update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules of the Financial Services Authority). Nothing in this announcement should be construed as a profit forecast or be relied upon as a guide to future performance.
Other information
The release, publication, transmission or distribution of this announcement in, into or from jurisdictions other than the United Kingdom may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published, transmitted or distributed should inform themselves about and observe such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities laws of any such jurisdiction.
ENDS
This information is provided by RNS
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