Seneca Partners has ambitious plans to double assets under management over the next three years through its acquisition of Miton’s Liverpool fund business.
Seneca’s chief executive Stuart Eaton told Wealth Manager that the acquisition of the Miton Capital Partners, the Liverpool fund management business, for up to £6.4 million would give the firm a broader proposition and hopefully expand its reach with intermediaries.
‘Our activities are peripheral to high net worths [HNW], we do interesting things utilising the Enterprise Investment Scheme (EIS) but all we have always wanted was a middle, more mainstream lower-risk business to complement our proposition,’ he said. ‘The sort of thing we do was never going to be more than 10% of their [HNWI’s] wealth.’
All Miton staff will be retained post the deal. ‘When we walk in the door, we don’t have existing fund managers, or existing staff in this space, so all Miton staff will be moving over,’ Eaton explained.
The Liverpool team of 14 includes Alan Borrows and Richard Parfect, managers of the the £140 million CF Miton Distribution fund, Simon Callow and Mark Wright who run the £160 million CF Miton Diversified Growth fund. Callow and Borrows co- manage the £60 million Midas Income & Growth Trust. The team will report to Eaton. In 2013 the Liverpool business had £466 million in assets, which generated a gross revenue of £4.6 million. While Eaton explained the Miton business had been ‘under-invested’ on the sales and marketing side, he hopes to double total assets under management in three years through a combination of both organic and inorganic growth.
Eaton said the mandates will remain unchanged, but the Miton name will be dropped from the funds. They will be renamed the Seneca Distribution and Seneca Diversified Growth funds.
‘I’ve always believed you need to be close to the clients, offer them access to the fund manager but they have not been out seeing the clients enough and not been marketing. Obviously at this stage, we need to get in that [this business], and kick the tyres,’ Eaton added.
‘It is a fantastic foundation on which to grow. The funds are quite low risk funds, so I think the environment now will hopefully play a bit more to their type of skill ’, Eaton said. ‘They can go into virtually every area because they are not massive, which is something the bigger funds cannot do.’
Eaton, who previously managed the Newton Managed fund until 2005 and Insight’s UK Equity Alpha team, said Seneca had been looking to acquire an ‘appropriate’ asset management firm since 2010 when the company was launched.
As part of its existing proposition, Seneca offers a Growth Capital EIS, Turnaround Investment and Private Equity funds.
In 2011 Seneca opened up its alternative fund range proposition to ultra-high net worth investors, financial advisers and private bankers. However, Eaton said he wanted to offer a broader proposition to intermediaries.
‘[The Miton team] knew us well, because we are local, and it was logical to us that the business didn’t fit as part of the London-based business.
‘Miton, which has been very successful with Gervais Williams, is very much a London business and it was tricky for them to run a business based out in Liverpool. It has always been managed separately from the Reading and London divisions,’ Eaton explained.
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