River and Mercantile Asset Management (R&M) has agreed to merge with an investment consultancy P-Solve to form a new diversified investment business, River and Mercantile Group (R&M Group).
The new business, which will operate under the under the R&M brand, will be headed up by P-Solve’s Mike Faulkner, while James Barham will continue to head the equity management business and will also assume a Group-wide role as head of distribution.
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The new group will develop new services by leveraging the equity management arm of R&M along with the asset allocation and derivative businesses at P-Solve.
The merger will expand R&M’s asset management capability beyond just equities and will allow it to offer structured equity, multi-asset class and derivatives capabilities.
Through this merger, P-Solve will develop its asset allocation and derivatives capabilities and will also leverage R&M’s execution platform to support the delivery of solutions.
Upon completion of the merger, R&M Group will explore the possibility of an IPO to raise capital for further investment in its growth strategy.
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By GlobalDataPacific Investments, the majority shareholder in River and Mercantile, and Punter Southall Group, the owner of P-Solve, will hold a significant stake in the new business while all management and key staff will hold equity interests in the group.
The proposed merger, subject to FCA approval, will seek to list on the London Stock Exchange to raise capital to fund further growth.
James Barham, R&M CEO, said: "This merger ensures that we are true to our founding principles, aims and objectives. This will accelerate our plans to develop a broad-based, diversified business where investment sits at the heart of our firm."
Mike Faulkner, PSL CEO, said: "This takes us forward significantly in our ability to continue enhancing the level of service we provide to our clients. This is both in terms of the expanded flexibility it will give us in developing investment solutions, and the depth of investment thinking that will exist in the combined business."
