Industry Updates

Liontrust sells credit team, including two hedge funds, to Avora Capital

Friday, April 15, 2011

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John Ions Opalesque Industry Update - Liontrust Asset Management PLC (Liontrust) has entered into an agreement for the sale of its credit business, including its credit team, to Avoca Capital Holdings (Avoca).

The two funds that the credit team manages (the Liontrust Credit Absolute Return Fund (CARF) and the Liontrust Credit Fund), with a total of £84 million in assets under management, will be transferred to Avoca.

At the same time, the individual members of the credit team (Simon Thorp, James Sclater, Paul Owens, Quentin Peacock and Gareth Roblin) will leave Liontrust and join Avoca. Completion is subject to applicable regulatory approvals and other customary closing conditions. The credit business represents 6% of Liontrust’s total assets under management.

The credit team has a strong track record but it is in a niche, principally institutional, area of the investment market. The team manages two credit long/short funds that are primarily invested in the high yield part of the European market.

The sale, and the consideration received from the sale, will free resources and enable Liontrust to expand its fund management capability, including through mainstream investment products and strategies.

This will enable Liontrust to build on its existing UK and European equity teams and their strong long-term performance records, stretching back to 1997 and 2006 respectively. There is growing demand from retail investors for developed market equities, which Liontrust is well positioned to take advantage of given our fund range.

Liontrust believes the sale will be for the benefit of investors in the two funds, Liontrust and its shareholders, Avoca and the credit team.

Avoca is a leading European credit manager based in Dublin and London with €6 billion of assets under management. Avoca has the resources to support the expected growth of the credit funds following the recruitment of the team.

The credit team will benefit by joining an investment house that is focused on credit investments and has 14 credit analysts to support its four strong fund management team. Through the continuity of the same fund management team, investment process and fund structures, in addition to the credit resources at Avoca, investors in CARF and the Credit Fund will benefit as well.

John Ions, Chief Executive of Liontrust, said: "We believe this transaction is a win-win for everyone concerned. Investors will benefit from fund management continuity and the resources of a much larger credit manager and Liontrust will free resources to expand our fund management capability.

"As we have publicly stated on a number of occasions, we are committed to growing our retail and institutional assets under management. We will do this through both marketing our existing UK and European equity funds, which have strong long-term track records, and recruiting new fund management teams. The strategy has not been changed by the sale of the credit team."

"There is no set timescale for this expansion. We will add fund management teams when the right opportunities present themselves."

(Press release)

Liontrust Asset Management, which was founded in 1994, is an independent fund management group whose shares are quoted on the London Stock Exchange. Liontrust manages £1.335 billion (as of 29 March 2011) in UK and European equities and Credit.

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