26 November 2021
RMG has today announced that it has entered into a contract (the “Sale Agreement”) for the Schroders group (the “Purchaser”) to acquire its Solutions business (“Solutions”) (the “Sale”). Completion of the Sale is conditional on RMG shareholder and regulatory approval.
The Board unanimously supports this Sale and believes this transaction with Schroders is a positive move for all stakeholders of the Group, for its Shareholders, its people, and its clients, combining one of the UK’s largest asset managers with the UK’s longest established solutions business. Solutions will maintain its distinct characteristics within Schroders, creating what the Board believes to be a compelling proposition in a rapidly growing and exciting industry. At the same time, this will enable RMG’s remaining business to focus on developing its specialist asset management capabilities.
The Sale is the outcome of a competitive sales process that the Board initiated having reached the view that the market capitalisation of RMG materially undervalued the Company and the sum of its underlying individual businesses and following a number of unsolicited approaches for Solutions. The Board has concluded unanimously that the offer from Schroders for Solutions should be recommended to Shareholders.
The Sale constitutes a Class 1 transaction for RMG under the UK Listing Rules and completion of the Sale is therefore conditional on shareholder approval at a general meeting of RMG that is expected to take place in mid-December 2021. As Solutions is authorised and regulated by the FCA, the Sale is also subject to the FCA approving the acquisition of Solutions by Schroders. The transaction is expected to complete during Q1 2022.
Following completion, the Board intends to return the majority of expected net cash proceeds to Shareholders and will consult with Shareholders regarding the amount, with the balance to be retained to support RMG’s future growth strategy. The Board intends to retain sufficient funds both to ensure that RMG’s existing business remains well capitalised and to facilitate its plans for the development of the asset management business. Further details of the proposed capital return will be included in the Circular to be sent to Shareholders.
The Board also announces its intention to refocus RMG as a specialist asset manager and to diversify and grow its investment capability, product range, and geographic exposure. RMG plans to create and offer a broader range of high quality and value-added equity products, and in-demand alternatives and private market products, building on the Group’s existing offering. It will initially focus this expanded offering through its existing distribution channels in UK wholesale and institutional markets which have generated consistent net inflows in the last 12 months. However, it also intends to extend distribution to expand its addressable market. The Board will:
The Board will develop its detailed post-Sale strategic plan over the coming months and will update Shareholders on this plan as part of a full strategy, capital allocation and dividend policy update in the Spring of 2022.
James Barham is the Chief Executive of RMG and Chair of RAMIL. Subject to and conditional on completion of the Sale, the Board has agreed that in connection with the Sale Mr. Barham will step down and transfer with the Sale to lead this business and also to play a broader management role within Schroders. In response to a request from Schroders, the Board has agreed to waive Mr. Barham’s notice period in order to facilitate the transfer. Mr Barham’s employment and appointment as CEO and Executive Director of RMG will therefore cease on completion of the Sale.
Mr. Barham will remain as CEO of RMG until completion and he will continue to work with the Board to ensure the successful completion of the Sale. Subject to and conditional on completion of the Sale, the Board has agreed that Alex Hoctor-Duncan will succeed James Barham as CEO of RMG. As previously announced, Alex is due to join the Board of RMG on 29 November 2021 as an Executive Director focused on strategic development.
RMG will release its preliminary results for the year ended 30 June 2021 on 8 November 2021. The Group is trading in line with expectations.
 Assets Under Management (AUM) represents amounts on which management fees and performance fees are charged across all asset classes managed by RAMIL. In relation to Derivatives, AUM represents the aggregate billing notional of the derivative contracts on which management fees are charged
 Source: RAMIL’s audited financial statements for the year ended 30 June 2021Source: River and Mercantile Group PLC
August 9, 2022
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