AssetCo has unveiled plans for a significant share reorganisation, aiming to better align its structure with its two key business areas: River Global and Parmenion.
The reorganisation involves the sub-division and reclassification of existing ordinary shares into New A Ordinary Shares and New B Shares, reflecting the distinct value drivers and investor appeal of its primary operations. Speaking to Insider, executive chair Martin Gilbert explained the rationale behind the move: “The share reorganisation will benefit the company and shareholders as the new share structure better reflects the value proposition of the company’s two separate and distinct business interests, River Global and Parmenion. It is anticipated that this will enable a more consistent valuation of the company in the mid-term, as well as making the company’s shares more attractive.”
Shareholder Approval Sought in March
The board plans to seek shareholder approval for the reorganisation at a general meeting scheduled for 6 March in London. The new structure would see the A Ordinary Shares represent AssetCo’s equity investment management operations under the River Global brand, while the B Shares would represent its economic interest in Parmenion.
In a statement to the stock exchange, the company noted: “The board believes that the factors driving value in these two lines of business differ significantly in terms of both quantum and the timing of any distribution and that, as a result, they have the potential to appeal to quite different types of investors.”
Financial Performance and Challenges
In its latest trading update, AssetCo reported an increase in assets under management, growing from £2.3m at the end of June 2024 to £2.7m by September. This includes more than £100m of new business into the UK Opportunities Fund and the launch of a joint venture that has attracted nearly €400m in additional assets under management.
However, the company faces ongoing challenges in the active equity asset management industry. According to its update, £193m in outflows were recorded in the first quarter of the current financial year, mirroring broader trends in UK equity fund products.
The company also noted mixed results in its client base. While a substantial UK mandate is set to commence in March 2025, a US client terminated its portfolios in December, resulting in a net neutral effect on assets under management.
Focus on Profitability
Despite these headwinds, AssetCo remains on track toward run rate profitability, reporting an unaudited operating loss of £2.9m and an overall loss of £4m for the year ended 30 September 2024. Gilbert told Insider: “The directors unanimously recommend that you vote in favour of the resolutions being proposed at the general meeting.”
Operational Progress
The company also reported progress on a back-office consolidation project, now expected to deliver results in early 2025.
With its share reorganisation plans and continued focus on profitability, AssetCo aims to position itself as a more attractive investment opportunity, reflecting the distinct strengths of River Global and Parmenion while navigating the challenges of a turbulent equity market.
Full-year results for the year ended 30 September 2024 are expected to be announced around 5 March.
