Challenger Limited’s boutique funds management division, Fidante Partners, is to acquire 100 per cent of European alternative investments group Dexion Capital Holdings Limited.
Dexion has interests in three specialist fund managers, and also has an investments distribution business, based in London.
The acquisition substantially expands Fidante Partners’ presence in Europe where it already holds interests in UK-based alternative asset managers, including global infrastructure investor Whitehelm Capital and asset-backed security specialist, WyeTree Asset Management.
Challenger’s Chief Executive Funds Management, Ian Saines, says: “This represents a significant step- up in our European presence and is an important part of our international distribution and product expansion. Dexion Capital’s funds management operation provides a scalable platform to realise our ambition of replicating Fidante Partners’ successful multi-boutique model in the European market, while opening up global distribution opportunities for our existing boutique managers.
“Dexion’s origins are in the development and marketing of innovative alternative asset investment strategies and this focus means it is well positioned as investors increase allocations to alternative asset classes.
“It provides us with a large established distribution channel to UK and European investors and, in addition, has been evolving into a multi-boutique manager much like Fidante Partners, taking long-term interests in asset managers and supporting them with distribution and operational services.”
Dexion Capital’s founder Robin Bowie (pictured), says: “We are very pleased to be joining forces with Fidante Partners which is a highly successful multi-boutique fund manager in the world’s fourth largest pension market, Australia.
“We believe that bringing the capability of Fidante Partners to Dexion Capital is very attractive to both investors and managers. For investors, it provides access to a range of managers who have the same high standards of reporting, governance, transparency and fair fees via our combined platform. For managers, it builds on Dexion Capital's existing distribution strengths by adding Fidante's capability in Australia.
“Alternatives are the fastest-growing investment sector and will comprise 15 per cent of global assets under management and 40 per cent of revenues by 20201. Moreover, boutique managers punch above their weight in alternatives.”
Challenger will make an agreed fixed payment of GBP19.6 million (AUD41 million) to Dexion’s shareholders. The final acquisition price is dependent on profitability over a period of up to six years, under earn-out arrangements with key Dexion executives.
The acquisition is immediately earnings accretive and is expected to meet Challenger’s 18 per cent pre-tax return on equity target.
Completion is expected to occur in July 2015, subject to final pre-completion steps
