Artemis bosses to buy back control from Fortis – and bag a bargain

Published on Monday 1 February 2010 21:27

THE founders and senior managers of Artemis are investing tens of millions of pounds as part of a deal to buy back the Edinburgh-based boutique fund manager from BNP Paribas' Fortis Bank.

&#149 Mark Tyndall: Deal will be good for fund management sector

They have joined forces with US investment firm Affiliated Managers Group, which will own a majority stake in the new partnership, to buy the company from Fortis, which has been looking to sell the boutique as part of its disposal of non-core assets.

While no figure has been disclosed, industry analysts believe the price paid will be less than a third of the 964 million the business was valued at when Fortis took full control in late 2008.

A steep fall in funds under management and changing market conditions since then means the price tag is thought to be between 200m and 300m.

"It seems a good deal for the Artemis team: they will be buying back in at a much lower price than they sold for and will have control back," said Gurjit Kambo of Numis Securities.

About 25 of Artemis's senior executives and fund managers are expected to own more than a third of the partnership once the deal is concluded.

Artemis co-founder and chief executive Mark Tyndall, who will continue to head the business, yesterday told The Scotsman that it was a good deal for the Scottish fund management sector.

He stressed that AMG would be financial partners rather than business partners and would not have a seat on the board of Artemis following completion of the deal, which is expected in the second quarter of this year.

"They have a proven track record of taking passive stakes in companies and this deal will enable us to continue to attract and retain talented staff and to develop our business in the best interests of our clients," he said.

Tyndall said the ending of uncertainty over ownership of the group would also benefit Artemis in getting back on to the pitch list for institutional business and that clients would be attracted to a partnership structure where management have a significant personal stake.

Although there are no immediate plans for Artemis to launch in the US, the deal with AMG could help pave the way for expansion there in the future.

Belgian-Dutch bank Fortis paid 317.2m for Artemis management's 32.9 per cent holding in October 2008 when Tyndall and fellow founders John Dodd, Derek Stuart and Lindsay Whitelaw collected a reported 145m between them.

At the time Artemis's managers said the deal for Fortis to take full control of the company was not its preferred option but that efforts to find an alternative shareholder had foundered.

Artemis, which was launched in 1997, employs about 45 people at its headquarters in Edinburgh's West End and a similar number in London.

It manages some 10bn of assets for retail and institutional investors in the UK, Middle East and Europe.

It will be the second UK fund manager that AMG has invested in following a 2004 deal with London-based Genesis Investment Management.