Edinburgh hub pledge after deal sealed for funds firm managing almost £600 million

An Edinburgh fund management business founded more than 30 years ago has been acquired by an investment vehicle chaired by Scottish financial services veteran Martin Gilbert.

SVM Asset Management, which was founded in 1990 by Colin McLean and Margaret Lawson, is being bought by AssetCo for a total of about £10.7 million.

The capital funds business currently has some £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 Fund, a £6.8m investment trust listed on the London Stock Exchange.

SVM generated turnover of £4.3m and a profit before tax of £2m for the financial year ended December 31, 2021 and had net assets of £14m as of the end of 2021.

Following a restructuring that is currently being undertaken by SVM it is anticipated that, at completion of the acquisition, the business will have net assets and net cash reserves of approximately £4m each.

McLean, who is managing director and chief investment officer of SVM, will become a director of AssetCo’s Scottish business. He will focus on ensuring a “smooth transition” for the firm’s clients, as well as helping to set the strategic direction of the Scottish business.

AssetCo said it was looking to build a strong asset management hub in Edinburgh, focused on managing listed equities. It has already sealed takeover deals in the city, including February’s acquisition of Revera Asset Management.

Lawson, who is UK investment director at SVM, will continue in her role managing UK equity portfolios, as will Neil Veitch, global and UK investment director, and Hugh Cuthbert, European investment manager. The existing 21 employees will continue to be employed by SVM.

Investment veteran Martin Gilbert was a co-founder and then chief executive of Aberdeen Asset Management which eventually merged with Standard Life in 2017.

Gilbert 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.

“The experience and expertise they will bring to AssetCo will be invaluable.”

McLean said: “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.

“I am pleased that with the backing of AssetCo we will be able to continue to build our focus on, and relationships with, existing clients, creating greater value for them, whilst also broadening our client base and growing assets.”

Gilbert will join the board of SVM on completion of the acquisition, which is anticipated to occur by the end of September.