Australian Ethical Investment announced that its acquisition of Altius Asset Management from Australian Unity was successfully completed on Wednesday.
In May, the company first entered into a binding agreement to acquire Altius, noting that the transaction would increase its funds under management (FUM) by approximately $2 billion, to $12.3 billion.
John McMurdo, chief executive of Australian Ethical, said the deal marks a significant milestone in the successful implementation of its growth strategy.
“Altius is a leading fixed income manager with a six-person team that will strengthen our fixed income investment capability and our ability to generate strong investment returns while influencing a future better for people, the planet and animals,” McMurdo said in a statement. reporting to the ASX.
“As we welcome the Altius team, we would like to thank Australian Unity for their continued support and partnership as we integrate the Altius business over the coming months.
Australian Ethical said in May it would pay Australian Unity $4.25 million in cash once the transaction was completed. An additional $1.25 million would be payable if Australian Unity’s investment met certain transition milestones and maintained agreed minimum FUM targets.
Although it has a lower revenue margin, in line with the fixed income asset class, the transaction is expected to generate approximately $1 million in EBITDA in the 2024-2025 financial year.
Additionally, Australian Unity will also become one of Australian Ethical’s largest institutional clients.
Namely, Altius will continue to oversee Australian Unity’s cash and fixed interest portfolios, as well as other fixed income funds and mandates currently managed by Altius.
Joining the company, Bill Bovingdon, co-founder and chief investment officer of Altius, said: “The Altius team is excited about the opportunities that lie ahead – combining our deep income expertise Fixed responsibility with Australian Ethical’s strong ethical heritage across multiple asset classes will enable us to deepen our relationships with our clients and support our growth.
Under the terms of the deal, Bovingdon, alongside co-founders Chris Dickman and Gavin Goodhand, will join the Australian ethical investment team under the leadership of chief investment officer Ludovic Theau.
In its annual financial statements for the year ended June 30, Australian Ethical reported 13 per cent growth in funds under management (FUM), to reach a record $10.4 billion.
She then clarified that this figure included the full-year impact of Christian Super SFT, but not the acquisition of Altius.
However, he said the next financial year would focus on integrating the business and implementing key strategic initiatives.
“The planned completion of the Altius acquisition in September 2024, together with continued organic growth and the increase in the pension guarantee rate, should support continued FUM growth in FY25 .”
