MitonOptimal and iimia Investment Group plan to retain their open and closed-ended multi-manager funds after their integration.
iimia is to pay £18.6m for at least 95% of MitonOptimal. This will be in the form of iimia shares and £1.9m in cash. The merged company will be called iimia MitonOptimal.
Ironically, the CF Miton Special Situations fund, managed by Martin Gray, owns more than 9% of iimia Investment Group’s shares in a stake that it has built up over the past three years.
Gray, joint managing director of MitonOptima, says: “It is probably too early to say exactly what will happen to our fund ranges. But it is likely we will continue with iimia’s and MitonOptimal’s funds.
“Asset allocation is a key part of the investment approach of both iimia and MitonOptimal. We are not benchmark driven, while iimia is just slightly more benchmark driven. Some of our multi-manager funds are in the same sector, but there are differences in approach, such as the risk profile.” The deal takes the groups’ combined assets under management and advice to £1.2 billion.
Gray says one of the aims behind the deal is to achieve greater economies of scale. “We were attracted to iimia by the people,” says Gray. “They also have excellent infrastructure whereas we have previously outsourced aspects like compliance and IT.”
iimia’s office in Exeter and MitonOptimal’s bases in Reading, Guernsey, Cape Town and Hong Kong will be retained. “We have shown since Miton’s merger with [Cape Town-based] Optimal two years ago that it can work even if you are not in the same location,” says Gray.
Mike Phillips, chief executive of iimia, says: “We have recognised the need to increase the scale of our business more quickly than organic growth would permit. The merger will increase our multi-asset funds under management, strengthen our fund management resource and extend the group’s distribution capability.”
Gray and Scott Campbell, joint managing directors of MitonOptimal, will join the board of iimia after the merger is completed in October. Duncan Abbot will step down from the board but will remain with the group.
The investment team at iimia includes Nick Greenwood, Richard Scott and Dan Lockyer.