AssetCo (ASTO), the acquisition vehicle of former Abrdn boss and founder Martin Gilber, has bought SVM Asset Management to spearhead the development of a Scottish hub.

Gilbert’s company will pay £10.7m for the Edinburgh fund boutique, met by £1.7m in cash and the issue of up to £9m 1% fixed rate convertible loan notes. 

The notes may be converted into ordinary shares of 10p each in AssetCo at an effective issue price of £14.50.

The deal is subject to the completion of balance sheet adjustments and approval by the FCA, which is expected to be received by the end of September 2022.

Following completion AssetCo will have approximately £3.5bn of assets in listed equity fund strategies across its various businesses.

SVM was founded in 1990 by Colin McLean and Margaret Lawson (pictured), whom, together with a family trust, are the significant majority owners.

On completion McLean, who is managing director and chief investment officer of SVM, will become a director of AssetCo’s Scottish business. Lawson, who is an investment director, will continue to manage her UK equity porfolios, as will fellow UK Investment director Neil Veitch and European fund manager Hugh Cuthburt 

The firm currently has around £586m of assets under management, including five open-end funds: UK Growth , UK Opportunities , Continental Europe , All Europe SRI and World Equity .

SVM also manages SVM UK Emerging (SVM ) Fund, a £6.8m investment trust listed on the London Stock Exchange.

AssetCo said it hopes the acquisition of the firm will ‘enhance its growing Scottish, as well as wider UK, brand.’

It will also see the addition of McLean, Garry Fyfe and Jonathan Hewitt to its Scottish board.

The acquisition is set ‘spearhead’ AssetCo’s plans to develop a significant asset management hub in Edinburgh.

It follows the buys of Saracen Fund Managers in 2021 and Revera Asset Management earlier this year. Together the three businesses run over £800m in assets.

AssetCo said all three businesses will retain their distinct active equity investment philosophies. They will share compliance, operational, distribution and marketing resources with River and Mercantile Asset Management.

Gilbert (pictured) said: ‘We are immensely proud to be building an asset management hub in Edinburgh that, over time, will broaden its client base across the UK and beyond. 

SVM is a well-regarded fund management firm, with a recognised investment style and a very strong investment track record.

Its business model, people and product offering are its key assets, and it is core to AssetCo’s ambitions. 

‘I have known Colin and Margaret for over 30 years, and I am delighted that both have agreed to remain with SVM. Both have built phenomenal reputations as investment managers over many decades in the industry.’ 

McLean (pictured) added: ‘When I set up SVM our aim was to leverage quality research and strong fundamentals to underpin our independent thinking and deliver great investor value.

‘I believe that our performance over the years demonstrates that we have been able to achieve this.’