ASSETCO PLC

Acquisition

22 July 2021

This announcement contains inside information under Article 7 of the Market Abuse Regulation (EU) No. 596/2014 (as amended) as it forms part of the domestic law of the United Kingdom by virtue of the European Union (Withdrawal) Act 2018 (as amended).

AssetCo plc

("AssetCo" or the "Company")

Acquisition of majority equity interest in Rize ETF Limited ("Rize ETF")

The Company is pleased to announce that it has reached agreement to acquire an effective 63 per cent. equity interest in Rize ETF (the "Acquisition"). The consideration will be £16.5 million (the "Consideration"), which will be paid in cash. AssetCo is also committing a further investment to Rize ETF of £5.25 million to help fund the growth of the business. The equity interest will be acquired from J&E Davy Holdings.

The Acquisition is expected to close on 27 July 2021 and is not conditional on regulatory approvals.

About Rize ETF

Rize ETF is believed to be Europe's first specialist thematic ETF issuer and one of the fastest growing providers of ETFs in the rapidly growing thematic ETF segment of the asset management industry. The business was founded in 2019 by an experienced management team, with a proven track record in establishing and scaling an ETF business and having helped build the ETF capabilities of Legal & General Investment Management.  Rize ETF employs nine people and is headquartered in London. To date, Rize ETF has launched four bespoke thematic ETFs, which provide investors access to funds investing in transformational megatrends in an accessible, transparent, low cost and purpose-built way. In addition, there are four further new fund launches planned for 2021, with the launch of Environmental Impact 100 ETF planned for late July 2021.

Rize ETF currently has over $450 million of assets under management ("AUM"), having launched its first ETF in February 2020. The ETFs are marketed using traditional and digital channels and distributed primarily through wholesale channels, including IFAs, private banks, wealth managers, family offices and discretionary fund managers. The ETFs are currently registered and available for sale in the UK and 12 countries throughout Europe, with plans for further geographic expansion.

Thematic ETFs allow investors to invest in investment opportunities outside of traditional sectors. According to Morningstar Research, total thematic fund AUM globally grew to $595 billion as of March 2021, from $174 billion three years earlier, with Europe representing over half of the AUM. AUM invested in thematic funds represents 2.1% of all assets invested in equity funds globally, up from 0.6% ten years ago. In Europe, total AUM allocated to thematic ETFs is estimated at over $40 billion.

To date, Rize ETF has launched four successful thematic ETFs: Cybersecurity and Data Privacy; Educational Tech and Digital Learning; Medical Cannabis and Life Sciences; and Sustainable Future of Food.  Rize ETF has a strong pipeline of anticipated launches of new thematic ETFs, underpinned by a detailed research ethos and an approach to the development of new strategies that partners with industry leaders in respective fields. Unlike many ETF providers, who licence off-the-shelf indices, Rize ETF develops its thematic strategies in-house, working with thematic sector experts in each case. Rize ETF was recently named winner of "Best New ETF Entrant" (ETF Express Awards, 2021) and "Best ESG Fund: Thematic" (ESG Investing Awards, 2021).

Following the Acquisition, management and employees will own an effective 37 per cent. equity interest in Rize ETF, of which 5 per cent. is subject to certain near-term performance conditions. For the financial period from 1 February 2020 to 30 December 2020, Rize ETF reported revenue of £197,569 and an operating loss of £1.93 million. As at 30 December 2020, Rize ETF had net assets of £326,927. In the current financial year Rize ETF continues to demonstrate significant growth, with current annualised run-rate revenues to June 2021 of more than £1.5 million.

Following completion of the Acquisition, it has been agreed with Rize ETF that Gordon Neilly, an adviser to AssetCo, and Gary Collins, Head of Distribution at AssetCo, will join the board of Rize ETF.

Benefits to AssetCo

The Board of the Company believes that there is enormous growth potential in the area of thematic ETF investing. Through a combination of AssetCo's support with incremental capital and asset management expertise, coupled with access to new partnerships and distribution opportunities, the Board is confident Rize ETF will continue to grow rapidly and maintain a leading position in providing thematic ETFs to investors.

The intention is that AssetCo will fund the consideration for Rize ETF from an equity financing by way of an accelerated bookbuild for approximately £25 million, which will be launched in due course and a separate announcement will be issued setting out further details of this.

Peter McKellar, Deputy Chairman and CEO of AssetCo, commented: 

"The team at Rize has built an impressive thematic ETF platform, based on an incredibly exciting ethos. It provides investors access to products that enable them to participate in new and relatable themes and benefit from strong growth led by secular trends.

The Rize approach to product development echoes one of the fundamental principles on which AssetCo's strategy is based: that a new approach to asset management, unbridled by legacy constraints and ways of doing things, will drive significant growth, as technology led manufacturing and distribution of investment products tap into the new, emerging trends in the way the next generation of investors choose to allocate their capital.

Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers. Rize has the team, pedigree and expertise to grow significantly and to continue to deliver product innovation for investors, building a world class thematic ETF business in the process. We are looking forward to working with the Rize ETF team in building the business and delivering value to investors and AssetCo's shareholders."

Enquiries:

AssetCo plc

Peter McKellar, Deputy Chairman and CEO

James Thorneley, Head of Communications

Tel: +44 (0) 7958 005 141

Numis Securities Limited

Financial Adviser

Ross Mitchinson, Co-CEO

Stephen Westgate, Head of Financial Institutions

Tel: +44 (0) 20 1760 1000

Arden Partners plc

Nominated adviser and broker

John Llewellyn-Lloyd / Akhil Shah / Louisa Waddell

Tel: +44 (0) 20 7614 5900

Maitland/AMO

Neil Bennett

Rachel Cohen

Tel: +44 (0) 20 7379 5151

In this announcement references to Rize ETF are to Rize ETF Limited.

This announcement includes "forward looking statements" including beliefs and expectations concerning (amongst other things) the financial performance and future opportunities for Rize ETF. By their nature forward looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual performance and the realisation of opportunities may differ materially from those expressed or implied by the forward looking statements contained in this announcement. Save as required by applicable law and regulation the Company undertakes no obligation to release publicly the results of any up-date/revision to the forward looking statements contained in this announcement.