Martin Gilbert bets on market swing as AssetCo battles losses

Martin Gilbert is banking on a market bounce to drive a recovery in his asset management business AssetCo after it reported a loss on the sale of an ETF provider to Cathie Wood’s Ark Invest.

Gilbert’s company reported a pre-tax loss of £27mn in the year to September 2023, more than double the year before, partly driven by the £12mn devaluation of its 68 per cent holding in Rize ETF, which was sold in September.

“In the long-only listed space, it is really about being there when the market turns . . . there is so much value there now that it’s a no brainer,” Gilbert told the Financial Times. “I’m a believer in active [management].”

Veteran dealmaker Gilbert, formerly co-CEO of Standard Life Aberdeen, is trying to cut costs and turn a profit from the business. Having sold the stake in the ETFs business and an infrastructure investment business, he is now focusing on active equity management as AssetCo battles negative investor sentiment and volatile markets. 

AssetCo, a cash shell that Gilbert took over in 2021, focuses on acquiring asset managers.

The sale of Rize ETF is part of AssetCo’s focus on later-stage companies as it moves away from building up businesses and towards managing costs in its existing companies.

Shares in AssetCo, which managed £2.4bn in active equities at the end of September 2023, fell 4.6 per cent on Monday, taking their fall over the past year to 44 per cent.

Although the performance of its funds improved — with 81 per cent of its assets under management beating benchmarks over the three years to September 2023, compared with 53 per cent a year earlier — investors still pulled money from AssetCo’s active equity asset management arm.

AssetCo said it cut £2.3mn in costs during the year to September 2023, and that it had identified a further £2mn-3mn in savings, including closing and merging smaller funds and rationalising corporate structures in the firms it has acquired.

Gilbert said AssetCo was still looking for potential acquisitions but also that, while there are opportunities in the current market, the company needed to be particularly selective given market sentiment. He added that he thought the asset management sector would see more consolidation in future.

“There are just too many small fund managers there . . . [but the sector] will rebound.”