Henderson Group has agreed to acquire 100% of Perennial Fixed Interest Partners Pty Ltd and Perennial Growth Management Pty Ltd from IOOF Holdings Ltd and the employee-shareholders of each company. The two companies have combined Assets Under Management (AUM) of £5.5bn (A$10.7bn).
In a separate transaction, Henderson has increased its ownership of 90 West Asset Management Pty Ltd from 41% to 100%. 90 West has AUM of £0.2bn (A$0.3bn) in global natural resources equities funds and segregated mandates.
Highlights
- These acquisitions accelerate Henderson’s strategy to grow and globalise its business, taking its Pan Asian AUM to 11% of the Group’s total from £4.0bn (A$7.8bn) to £9.6bn (A$18.7bn).
- Perennial’s fixed income and equities expertise will significantly extend Henderson’s offering to Australian clients, adding domestic investment management capability to Henderson’s globally focused offerings and providing a broader platform for future growth in the Australian market.
- The Perennial transactions create an opportunity to forge a strong relationship between Henderson and IOOF, one of Australia’s leading wealth management and advice platforms.
- Full ownership of 90 West will enable Henderson to benefit from the pipeline of new business the firms have created together, both in Australia and globally.
- On completion of these transactions and the sale of its 40% interest in TH Real Estate which completed on 1 June, Henderson’s capital position will improve by £40m. Henderson will update the market on its capital position at its Interim Results on 30 July 2015.
Transaction structures
As part of the Perennial transactions, IOOF receives an upfront consideration and a deferred component dependent on future business performance, payable after two and four years.
In all three businesses, the employee-shareholders will receive a significant majority of their consideration through deferred earn-out structures to be paid four years post completion, with the quantum dependent on future business performance. Key investment professionals in all businesses have signed long term employment contracts with Henderson.
All transactions will be funded from existing cash resources.
The 90 West transaction closed on 29 May 2015, and the Perennial transactions are expected to close in the fourth quarter of 2015. Following these acquisitions, Henderson will continue to build out its distribution and business operations in Australia to deliver growth for new and existing businesses and teams.
Andrew Formica, Chief Executive of Henderson, said: “Developing our presence in Australia is a strategic priority for Henderson. These acquisitions will give us recognised domestic investment management capabilities to complement our global offering and take us into the Top 30 of Australian asset managers. They help us build scale in our Australian business well ahead of our previous expectations. On completion, we will more than double our AUM from Pan Asian clients and have around 40 investment professionals based in the region, managing money on behalf of local and international investors. This is another important step towards achieving our ambition to become a truly global asset manager.”
Glenn Feben, Managing Partner of PFI, said: “Our team is delighted to be joining Henderson. For us to become part of a truly global fixed income team will provide real benefits to our investment team and to our clients.”
Lee Mickelburough, Head of PGM, commented: “We see a strong cultural alignment with the team at Henderson and look forward to being part of an independent, investment-led firm, which will help us focus on investment performance for our clients and navigate our path to future growth.”
David Whitten, Executive Chairman of 90 West, said: “Over the last two years, we have formed a close relationship with Henderson, both in Australia and worldwide. We have seen the value they bring to our business. We are thrilled to be part of Henderson, and are now better positioned to deliver to our clients and to grow.”
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