Industry veteran Martin Gilbert has revealed to FT Adviser how he plans to turn around AssetCo, the industry consolidator he co-founded.
AssetCo’s share price is down 44 per cent over the past year.
Among the firm’s assets are a shareholding in Parmenion, the platform and DFM business, and River Global, a collection of active fund management businesses it acquired - notably River and Mercantile, Saracen and SVM.
Yesterday (March 18), AssetCo released its latest results which showed a loss of £7.7mn and a statutory loss of £26mn.
That statutory loss reflected the costs of the company exiting loss making operations including the Rize ETF business and River and Mercantile’s US operation.
The Rize ETF business contributed an operating loss of £2.6mn.
Gilbert told FT Adviser it was tough for this business to compete against the bigger ETF firms in the market, “so we were fortunate that Cathie Wood at ARK wanted to buy it, she is massive in the ETF market.”
Gilbert said the activities over the past year mean all of the structurally loss making operations have been jettisoned, while the number of staff working in the active equity business was reduced by 40 to 79.
Gilbert said the present market conditions are “very tough” for long only equity fund managers, and said his priority at the moment is to “focus on running the business efficiently".
He added: "There is another £2-3mn of housekeeping to be done in terms of savings. We will focus on that for now, and if something comes up for us to buy, then we will look at that.
"Every asset manager has had to get to grips with cost management. At one time active asset management firms were so profitable it wasn’t always an issue.”
One bright spot in the results was Parmenion. AssetCo acquired a 30 per cent stake in this business in 2021, and Gilbert now implies a valuation to that stake of £75mn.
He said while the business was profitable, if the chance came to monetise its holding, Assetco "might take that chance and buy back some shares".
The other profitable business unit is Ocean Dial Asset Management, which Gilbert said makes a profit of about £1mn a year and has the capacity to make more, in his view, as it integrates into the wider AssetCo business.
Gilbert said his priority for the coming year is for inflows to happen into the actively managed funds run by the company.
david.thorpe@ft.com
