Gresham House plc (LON:GHE), the specialist alternative asset manager, has today announced that Gresham House Asset Management Limited and Strategic Equity Capital plc have entered into an investment management agreement whereby GHAM will become SEC’s new investment manager and alternative investment fund manager. The appointment will be effective from 21 May 2020.
It remains the intention that Aberdeen Standard Gresham House Investment Management Limited, the proposed joint venture between Gresham House and Aberdeen Standard Investments (acting through Aberdeen Asset Management PLC), will assume the roles of investment manager and alternative investment fund manager upon receipt of regulatory approval and satisfaction of other conditions. Until then, GHAM will enter into a distribution and marketing agreement with the ASI Group to assist with the marketing and promotion of SEC.
SEC’s current portfolio managers, Jeff Harris and Adam Khanbhai, will become employees of Gresham House which will now include a new investment committee, chaired by Tony Dalwood, and supported by the platform and network in Strategic Public Equity that Gresham House has developed with its 20-year track record in this area.
Further to the announcement of the key terms of the investment management agreement in the announcement of 27 March 2020, and in light of the fact that Jeff Harris and Adam Khanbhai will continue to be the SEC portfolio managers, the existing high watermark for the performance fee will be retained (rather than reset) and there will be no change to the performance fee calculation period.
The Company also announced that at this early stage in the financial year, current trading is in line with market expectations. The Company announces today an update on Assets Under Management (AUM) in light of the COVID-19 pandemic. As at 30 April 2020 proforma AUM has risen to £3.2bn, up 13% on 31 December 2019 in difficult market conditions, highlighting the robust nature of our AUM base and distribution function.
Real Assets have grown by £310 million (15%) since 31 December 2019, through a combination of fundraising of £131 million, which includes the final close for the British Strategic Investment Fund (BSIF) on 15 May 2020, and the acquisition of Resi REIT plc (£184 million) management contract as part of the TradeRisks acquisition.
The Strategic Equity division has seen net positive AUM growth of £50m (7%) since 31 December 2019, despite the market impact of COVID-19 reducing AUM by £104 million, which was offset by net fund raising of £62 million and the Strategic Equity Capital plc (SEC) contract win which is due to start on 21 May 2020.
Proforma Assets Under Management as at 30 April 20203
| £ millions | AUM Dec-19 | Net Fund Flows1 | Performance | Funds Acquired/Won2 | Pro Forma AUM Apr-20 | Total Growth% |
| Strategic Equity | ||||||
| Public Equity | 283.7 | 40.0 | (53.1) | 147.6 | 418.2 | 47.4% |
| Private Equity | 424.5 | 21.7 | (51.3) | (55.2) | 339.7 | (20.0)% |
| Subtotal | 708.3 | 61.6 | (104.4) | 92.4 | 757.9 | 7.0% |
| Real Assets | ||||||
| Forestry | 1,333.3 | – | – | – | 1,333.3 | – |
| New Energy | 535.3 | 31.2 | (5.2) | – | 561.3 | 4.9% |
| Infrastructure & Housing | 220.0 | 100.0 | – | 184.0 | 504.0 | 129.1% |
| Subtotal | 2,088.6 | 131.2 | (5.2) | 184.0 | 2,398.5 | 14.8% |
| Total AUM | 2,796.8 | 192.8 | (109.6) | 276.4 | 3,156.4 | 12.9% |
Notes
1. Including funds raised, redemptions and distributions.
2. The LMS contract was terminated in January 2020 with a NAV of £55 million and is included in Funds Acquired/Won.
3. Proforma AUM to 30 April 2020 includes all funds as at 30 April 2020, plus the recent £300 million final close of BSIF and the win of the £148 million SEC plc mandate.
Anthony Townsend, Non-Executive Chairman states:
“We are encouraged to see our AUM continue to grow both organically and through acquisition, highlighting the resilience of Real Assets and the potential for growth in Strategic Equity.
“During this exceptional period, the safety and wellbeing of our staff is our main priority and we are taking every measure needed to ensure this while maintaining our operations.
“Despite equity markets expected to remain volatile, Gresham House continues to execute on its strategy to build on its existing alternative asset management platform. We are at the start of our recently outlined five-year strategic plan, “GH25″, which includes an increasing focus on the ESG opportunities within our Group.”
