LONDON — ISIS Asset Management acquired F&C Asset Management in a reverse takeover from F&C parent Eureko.
Friends Provident, which owns 67% of ISIS Asset Management, will merge the two units and own 51% of the combined entity, which has £120 billion ($220 billion) in assets under management, making it the fourth largest U.K. asset manager. The cash and stock deal values F&C at just more than €1 billion ($1.2 billion), said Alain Grisay, F&C deputy chief executive, who expects the deal to be closed in September.
The ISIS brand will be dropped, and F&C staff will take responsibility for the combined institutional business. Mr. Grisay will be head of institutional asset management for the combined firm. Tony Broccardo, current chief investment officer for F&C, will be CIO of the new company. Howard Carter, ISIS chief executive, will become CEO, and Robert Jenkins, F&C chief executive, will be non-executive chairman of the new group.
The deal gives F&C a long-awaited opportunity of a stock-market listing and provides ISIS with access to retail and institutional distribution networks outside the United Kingdom.
Amsterdam-based Eureko announced in January that it was seeking a listing for F&C, which includes the asset management operations of Achmea one of the largest institutional asset managers in the Netherlands.
Around 1% of F&C's total assets of £56.4 billion at the end of 2003 were managed for U.S. clients who will not be affected by the deal, said Mr. Grisay. The firm runs mainly emerging market mandates for its U.S. clients and ISIS has no presence in this asset class. The F&C investment process and key investment staff will remain in place. There will be staff losses as a result of the deal, but the majority of institutional money managers are expected to remain in place, said Mr. Grisay.
As a public company, F&C will be able to translate its shadow equity program into a more tangible compensation system. This will help retain key staff and build loyalty, said Mr. Grisay. F&C executives and key staff have volunteered to invest their shadow equity assets into the new company and will lose this money if they leave within the first two years, he added.
At the end of 2003 ISIS had £63.5 billion in assets under management around 80% of which was in institutional assets run mainly for its parent company, he said.