Treasury Group has paid less than $1 million for the acquisition of Souls Funds Management from Washington H Soul Pattinson.
"What we sort of alluded to in the annual general meeting (AGM) is that they have cash well north of $1 million on the balance sheet and we are buying it at a discount to that," Treasury Group managing director Mark Burgess told InvestorDaily.
"We will have some costs because obviously the teams will change, but from our point of view it was a very attractive deal," Burgess said.
But the acquisition price was not the reason behind the takeover, he said.
"The most attractive part is getting access to a team which is of such high quality," Burgess said.
Treasury will allocate significant staff equity to the firm's key people: chief investment officer Frank Villante, senior analyst Andreas Stephens and analyst Scott Armstrong.
Treasury usually retains 40 per cent in the boutiques it acquires, Burgess said.
Although the company is looking to implement a similar model with Souls, the final interest held by Treasury might be lower than that, Burgess said.
"We have not yet concluded on it so it might not be the actual numbers," he said.
Souls currently has about $300 million in funds under management and Treasury expects to triple this figure over time.
"We are going to use our distribution skills to bolster it further," Burgess said.
Including Souls, Treasury has made three boutique acquisitions in the last two months. In September it announced the acquisition of AR Capital Management and Aubrey Capital Management.
During the AGM, Treasury said it would continue to add boutiques and flagged fixed income as an area where it was lacking exposure.
But Burgess said expansion in this area was problematic for a number of reasons.
"For example, in government fixed income the efficiencies of scale are quite difficult to achieve, but in other areas fixed income is quite attractive," he said.
"I guess we have spoken to lots of people and lots of people have come to us. There is nothing imminent," he said.
