SAM buys up small fund managers
Syndicate Asset Management's acquisition of Ashcourt Holdings for £13.1 million ($23.7 million) might signal a new approach in the UK fund management industry, marked by a shift towards the consolidation of small funds.
SAM, set up in March by Equity Special Solutions, a company listed on London junior market AIM, intends to acquire small funds with the goal of bringing "some billions" worth of assets into its portfolio, according to Jonathan Freeman, a director at SAM.
John Morton, chief executive at Ashcourt, says the merger "will be the first of a flow of many". He estimates that with the remaining equity available, SAM could accumulate approximately £1.5 billion in assets. It has already pulled in £600 million with the acquisition of Ashcourt.
Ashcourt and any further acquisitions, Freeman says, would retain their respective brands, but would integrate their operations and back-office divisions in an effort to benefit from economies of scale.
"Over a period of two to four years, you can definitely create economies of scale," says Freeman. "You do not need two human resources departments, or two heads of compliance.