AssetCo is poised for further expansion after reporting rising annual profits and a quadrupling of share value.
The group's preliminary results for the year ended 30 September 2021 revealed profits before taxation of £16.1m - up from £3.4m in 2020 - while its capital position went from £32.3m to £56.1m.
During the 12-month period, AssetCo's share price more than quadrupled to close at £17.00 per share - compared to £4.11 per share in 2020.
The growth follows equity stakes being taken in Rise ETF, Parmenion, Saracen Fund Managers, and most recently, River and Mercantile.
Chairman Martin Gilbert, whose senior team now includes several former Aberdeen Asset Management colleagues, described the past year as “transformational”.
He stated: “The company is being transformed and has successfully put in place some of the building blocks required for it to become a 21st century asset and wealth management business that delivers for investors and makes a difference.
“We will look to develop these businesses and explore other opportunities.”
The new strategy that has been adopted by AssetCo is focused on building and operating an asset and wealth management business - which has gone from zero to £9.6bn in assets under management.
Gilbert added: "The industry is contending with significant structural shifts, including technological advances, a reorientation of investment habits and evolving client needs that will have a profound impact on the business models of many existing asset management and wealth providers, their offerings and the choices available to clients and savers."
At the start of October 2020, the company concluded the Grant Thornton litigation case, as the professional services firm decided not to appeal to the Supreme Court, thereby crystallising the award from the Court of Appeal ruling on 31 January 2019 amounting to £30.5m, including costs.
This formed the basis of returning £26.9m to shareholders, by way of a tender offer which was fully subscribed. The company purchased 6.53 million shares, equivalent to 50% of its then issued share capital, at £4.11 per share.
Deals during 2021 included the acquisition of active equity manager Saracen for £3.44m, taking a majority stake in Exchange-Trade Funds firm Rize for £16.5m, and a 30% equity stake in fund platform Parmenion for £27.8m.
After taking a stake last year, at the start of this month AssetCo made a £98.8m offer to acquire River and Mercantile Group, further to the sale of River and Mercantile Solutions division to Schroders.
"It strengthens our active equity capability and importantly provides a foundation stone to building a private markets business given its infrastructure investment team," explained Gilbert, adding: "It will complement our existing presence in thematic investing with Rize ETF and our investment in Parmenion, a digital platform for the financial planning sector."
However, last week River & Mercantile announced that it had lost a £927m mandate across several of its global equities strategies.
In a note to the stock exchange, the firm said it had received a redemption notice from a client of its equities management division. The assets represent £2.8m of the firm's annual revenue.
Chief executive Campbell Fleming commented: "The asset and wealth management industry is going through a period of significant change including technological advances, evolving investor needs and habits.
"To address these structural shifts the businesses we have invested in encompass four key areas - active management in both public and private markets, high growth thematic investing, ESG and digital solutions.
"I am confident that AssetCo has established the foundations to continue to grow organically and through selective acquisitions and most importantly to deliver for investors."
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