Australian Ethical Investment has announced that its acquisition of Altius Asset Management from Australian Unity was successfully completed on Wednesday.
In May, the firm first entered into a binding agreement to acquire Altius, noting that the transaction would boost its funds under management (FUM) by circa $2 billion to $12.3 billion.
John McMurdo, Australian Ethical chief executive, said the deal marks an important step in the successful execution of its growth strategy.
“Altius is a leading purpose-driven fixed-income manager with a team of six that will deepen our fixed-income investment capability and ability to deliver sound investment returns while influencing a better future for people, planet and animals,” McMurdo said in a statement to the ASX.
“As we welcome the Altius team, we’d like to thank Australian Unity for their ongoing support and partnership as we integrate the Altius business over coming months.”
Australian Ethical clarified in May that it would pay Australian Unity $4.25 million in cash upon the completion of the transaction. An additional $1.25 million would be payable if Australian Unity investment meets certain transition steps and maintains agreed minimum FUM targets.
While at a lower revenue margin consistent with the fixed income asset class, the transaction is expected to generate circa $1 million of EBITDA in FY2024–25.
Moreover, Australian Unity will also become one of Australian Ethical’s largest institutional clients.
Namely, Altius will continue to oversee Australian Unity’s cash and fixed interest portfolios, as well as the other fixed income funds and mandates currently managed by Altius.
On joining the firm, Altius co-founder and chief investment officer Bill Bovingdon said: “The Altius team are excited by the opportunities ahead of us – combining our deep expertise in responsible fixed income with Australian Ethical’s strong ethical heritage across multiple asset classes will enable us to deepen client relationships and support further growth.”
Under the deal terms, Bovingdon, alongside co-founders Chris Dickman and Gavin Goodhand, will join the Australian Ethical investment team under chief investment officer Ludovic Theau.
In its full-year financial statement for the year ending 30 June, Australian Ethical reported 13 per cent growth in funds under management (FUM) to a record $10.4 billion.
At the time, it clarified that this figure included the full-year impact of the Christian Super SFT, but not the acquisition of Altius.
However, it said that next financial year, it would focus on the firm’s integration and deliver on key strategic initiatives.
“The expected completion of the Altius acquisition in September 2024, as well as continued organic growth and the increase of the superannuation guarantee rate, is expected to underpin further FUM growth in FY25.”
