Australian boutique funds management firm Fidante Partners has agreed to buy Dexion Capital, the London-based alternative investments group.
Dexion’s founder, Robin Bowie, told PDI that the deal gave his firm the right partner for the next stage of its growth and boosted Fidante’s international expansion.
The agreement brings stakes in three more alternatives managers to Fidante, the funds management division of Challenger Limited, an ASX-listed investment management firm which oversees more than $60 billion in assets, as of 31 March.
Challenger will make an upfront payment of £19.6 million ($30.5 million; €27.8 million) to Dexion’s shareholders with the final price dependent on profitability over the next six years under earn-out arrangements with Dexion executives, according to a statement by the firms.
Fidante holds stakes in around 17 fund managers and has been expanding its presence in Europe where its interests include Whitehelm Capital and secured credit manager WyeTree Asset Management.
The acquisition of Dexion adds minority positons in three more alternatives managers: Resonance Asset Management Limited, a renewable energy investment firm; UK-based social housing investor Horizon Infrastructure Partnership Limited; and Agricultural Asset Management Limited, which invests in agriculture in the US and the UK. Dexion also manages London-listed alternative asset fund Dexion Absolute Limited.
As well as its stakes in niche alternatives managers, Dexion Capital runs a distribution business and has worked on a number of listed private credit fundraisings, including Chenavari’s Toro Limited and the Blackstone CLO originator vehicle Blackstone/GSO Loan Financing Limited, which raised €301.2 million in July 2014.
“This represents a significant step-up in our European presence and is an important part of our international distribution and product expansion,” said Ian Saines, Challenger’s chief executive, funds management. “Dexion Capital’s funds management operation provides a scalable platform to realise our ambition of replicating Fidante Partners’ successful multi-boutique model in the European market, while opening up global distribution opportunities for our existing boutique managers.”
The acquisition came about after two potential buyers approached Dexio. In response, the firm appointed Cavendish to run a sale process, Bowie said, adding that the sale was dependent on the firm finding the right partner.
The Dexion team will remain in its current London offices close to Blackfriars where the European unit of Fidante Partners will join them, Bowie said. The Dexion Capital brand will be maintained and Ana Haurie will continue in her role as executive group managing director. Challenger’s Saines will join Dexion’s four-person board of directors.
“We believe that bringing the capability of Fidante Partners to Dexion Capital is very attractive to both investors and managers. For investors, it provides access to a range of managers who have the same high standards of reporting, governance, transparency and fair fees via our combined platform. For managers, it builds on Dexion Capital's existing distribution strengths by adding Fidante's capability in Australia,” said Bowie.
The sale is anticipated to complete this month.
Challenger has two core business lines: a funds management division and a regulated annuities arm.
Fidante Partners provides services and support to investment managers through minority ownership stakes in their businesses.
Dexion Capital partners with alternative asset managers to either white-label products or form a strategic relationships where it provides distribution services, operational support and business development. The employee-owned business was founded in 2000.