Gresham House plc (LON:GHE) Chief Executive Officer Anthony Dalwood caught up with DirectorsTalk for an exclusive interview to discuss the acquisition of Livingbridge VC and what this means for them and their shareholders and their focus going forward.
Q1: Gresham House is on a growth trajectory with the recent acquisition of the fund and investment management businesses of Livingbridge VC, namely the two Baronsmead VCT’s and two OEIC’s with a collective AUM of £0.5 million. Could you give us an overview of the deal?
A1: We’re very excited here at Gresham House about this transaction.
Baronsmead is a very well-known brand particularly for the long-term in the VCT community and particularly, we look forward to working with the Board’s of the VCT’s and the transferring team maintaining their high standards. They have a very longstanding track record in this space and are very well-known.
In addition to these VCT’s, we also have acquired a couple of funds managed by Ken Wotton, Graeme Bencke and Brendan Gulston, Livingbridge equity funds. Those OEIC’s are things which we are very excited about putting our expertise behind and growing them. They also have some good track record in their Livingbridge UK Micro Cap Fund and the more recent Livingbridge UK Multi Cap Income Fund.
So, we’re excited about that, to get behind and support them and grow all of those products.
Q2: So, who is Livingbridge and why are they such a good fit for Gresham House?
A2: Livingbridge is a very successful private equity business and within it they have a unit that manages these two VCT’s and the equity funds we’ve mentioned. Baronsmead was founded in 1995, they’ve been exceptionally good performers over a very long term and we’re just proud to be chosen, privileged to be chosen, to be able to take them on to the next stage of their growth.
Q3: Can you talk us through what this deal means for GHE and its shareholders and clients?
A3: It’s always the primary factor that we enter in for any potential transaction, Gresham House is growing organically but also through acquisition. This acquisition allows us to expand our Strategic Equity division to over £600 million in assets under management, the Gresham House group now has over £2 billion of assets under management.
The important bit is focussing on shareholder value and the earnings enhancement potential from this for GHE is significant, it will help us accelerate our operating margins towards our target of 40%. Importantly, when we deploy our capital, we can consistently go through an analysis which aims to achieve a threshold return of at least 15% and we believe this will do that over a medium term as well.
In addition to that, we have strategic opportunities, our project range is expanded and deepened, and we have significant synergy opportunities. I suppose, importantly also that the team that’s coming across from Livingbridge and Baronsmead have a very similar culture in investment philosophy.
So, all in all, both strategically and financial, we’re excited and very positive about this transaction.
Q4: Now, this is Gresham House’s second acquisition this year, what is your focus in the near term and the long-term and how does this play to your vision?
A4: We always intend growing organically and through acquisition and there are synergies here and are almost in everything we do so this transaction is consistent with that.
We aim to be a business which is focussed on alternative asset management, we want shareholders, employees and clients to be proud of being a part of the GHE family.
All in all, this contributes, in our opinion, to all of those factors and we remain continuing the momentum of growth and shareholder value within the company.
