Investment manager

Tatton buys 50% stake in investment manager 8AM

Tatton Asset Management has entered into a sale and purchase agreement to acquire 50% of investment manager 8AM Global.

The deal is for a total consideration of £7 million which will see Tatton acquire half of the issued share capital.

As part of the deal, there is also an option to acquire an additional 50% in due course.

The transaction remains subject to regulatory approval.

In November 2021, Tatton said Money Marketing it will continue to “build a pipeline” of M&A activity, based on a solid set of half-year results.

Tatton chief executive Paul Hogarth said after completion the 8am deal would be the second acquisition in less than a year for the group.

In September 2021, Tatton acquired Fintel’s Verbatim fund ranges, under a distribution partnership. The deal added £650 million to Tatton’s assets under management (AUM).

This, Hogarth said, “demonstrates that we are executing on our three-year ‘Roadmap to Growth’ strategy.”

8AM is an investment manager primarily focused on providing Risk Profiled Model Portfolios (MPS) and a small range of multi-manager funds.

Tatton expects these to complement its existing proposition and show that it “helps financial advisors deliver low-cost investment management and improve client outcomes.”

Upon completion of the deal, Tatton expects 8AM to add approximately £800 million in assets under management (AUM) to its existing £11.3 billion.

The proposed acquisition also gives Tatton access to a wider distribution base of UK financial advisers. It also adds an “ambitious and strong” management team with extensive industry experience.

The counterpart of £7m represents 0.88% of assets under administration.

It comprises 50% or £3.5 million of upfront consideration, payable through the issue of new shares, and deferred consideration of £3.5 million payable in equal cash installments against financial performance targets at the end of the first year and the second year following completion.

Hogarth said: “With a three-year target of £6bn of growth in assets under management, at the end of the first year we remain on track to achieve this.

“This year we have grown organically by £1.7 billion and acquisitions to date have contributed an additional £600 million, a total contribution of £2.3 billion to the goal and, at the end, 8 a.m. will further increase this number.

“We look forward with confidence to the future as we move forward and continue to achieve our strategic goals.”

8AM Managing Director Jeremy Nunn said: “The sale will allow 8AM to build on its success and give us access to the know-how and expertise of one of the market leaders in the MPS space. .

“It will serve as a springboard for the growth of our assets under management and provide advisors and investors with the assurance that the development and resilience of 8AM products will continue to be at the forefront of our plans.”