Henderson Global Investorshas entered into an agreement to acquire the entire issued share capital of Geneva Capital Management. Founded in 1987, Geneva has assets under management of US$6.3bn (As at 31 May 2014) in Mid- and Small-Cap US growth equities.
- An important strategic milestone in the development of Henderson’s North American business
- Geneva will add US equity investment capabilities and extend US institutional client base
- Initial consideration of US$130m; deferred consideration linked to revenue retention of up to US$45m; and growth-related earn-out of up to US$25m
- Expected to be underlying earnings accretive in the first full year post acquisition.
North American business update
- Henderson’s North American business continues to grow rapidly, doubling its AUM since 2011
- In May 2014, the US Mutual fund range reached US$10bn for the first time, with net inflows of US$1.4bn in the year to date
- A US based institution awarded a significant new mandate to the Henderson Global Equity team in May 2014
- Having joined in 2013, the US high yield team has achieved 2nd percentile investment performance in its first full year of operation. Investment grade expertise has been added to the team to expand Henderson’s US and global credit platform
- The acquisition of Geneva will enable Henderson to continue to build its North American business.
Acquisition of Geneva Capital Management
- Accelerates delivery of Henderson’s strategy to grow and globalize its business
- Post acquisition, the North American business will have approximately US$18.3bnof AUM, representing nearly 15% of the Group on a pro forma basis
- Geneva’s investment expertise in US growth equities fills an important capability gap for Henderson
- Geneva has a long track record in managing Mid- and Small-Cap growth equities, underpinned by a disciplined and consistent investment process
- The addition of Geneva will double Henderson’s number of US-based investment professionals
- The acquisition will transform Henderson’s North American presence, bringing proven institutional distribution capabilities to complement Henderson’s successful retail franchise
- The acquisition will quadruple Henderson’s US institutional AUM
- It will create a well-balanced client base, split broadly equally between retail and institutional
- Geneva’s principals have signed long-term employment contracts and have agreed to reinvest at least 30% of net sale proceeds into Geneva products
- There is a strong cultural fit between the two firms and Geneva principals will become valued members of Henderson’s equity and North American management teams
- Over time, the transaction creates opportunities to build new products with US content (e.g. Global Small-Cap and US All-Cap); launch new US equity retail products; and market Henderson capabilities more actively to US institutions.
This transaction is expected to close on 1 October 2014, subject to customary consents.