London & Capital sells DFM business to Momentum

Andy Davies MomentumLondon & Capital has sold its £200m DFM business to Momentum, transferring its 15 model portfolios.

Momentum has acquired the Adviser Solutions business from L&C, and will take over management of its model portfolio range.

The move will see L&C’s Adviser Solutions unit sit within the Momentum Global Investment Management business, and will include the manager’s existing Factor Series of funds.

Andy Davies, head of UK business development at Momentum Global Investment Management, previously told Fund Strategy he wanted to expand the DFM offering at the firm.

“This acquisition presents us with a great foundation on which to accelerate our growth as an investment solutions provider to the UK adviser market,” says Ferdi van Heerden, Momentum UK chief executive.

“With the addition of a mature DFM solution to complement our unitised Factor Series fund range, we now have a proposition that can cater for a wide range of IFA’s customer needs.”

The model portfolios will now be managed by portfolio manager James Klempster and his team, who run the three Factor funds.

As part of the deal six staff in the Adviser Solutions team will move to Momentum when the deal is complete on 1 July this year. The Adviser Solutions brand name will be retained.

Davies says Momentum has no plans to shut any of the model portfolios at this stage, but will review adviser demand further down the line. The portfolios will also be rebranded in the next few months to bring them in line with Momentum’s existing products.

While the assets in the model portfolios are “not the largest” the acquisition of the range gives access to a large range of IFA relationships, says Van Heerden.

Davies says the group continues to be on the lookout for other acquisitions to boost the UK business, but will not enter into “acquisition for acquisitions sake”.

Van Heerden says: “We have said a few times before that we are quite focused on growing the UK domestic business, when we launched the Factor funds and when Andy joined and bulked out the team. I think when opportunities come along we will consider them, as long as it fits into our broader focus on outcome-based solutions and ensuring the financial wellness of clients.”