Australian Ethical has announced it has entered into a binding agreement to acquire Altius Asset Management from Australian Unity, increasing its funds under management (FUM) by $2 billion.
In an ASX statement, the firm said it will acquire Altius, a sustainable fixed income asset management business.
This will bring around $2 billion in FUM to Australian Ethical, increasing it to $12.3 billion.
The combined Australian Ethical and Altius fixed income capability will result in a sustainable fixed income team of seven, an expanded bond fund portfolio, and Australian Unity becoming one of Australian Ethical’s largest institutional clients.
Under the deal terms, Altius co-founders Bill Bovingdon, Chris Dickman and Gavin Goodhand will join the Australian Ethical investment team under chief investment officer Ludovic Theau.
Australian Ethical will pay $4.25 million to Australian Unity in cash upon transaction completion, subject to conditions, with an additional $1.25 million payable after completion, contingent on Australian Unity investment
meeting certain transition steps and maintaining agreed minimum FUM targets.
Altius, as part of Australian Ethical’s expanded fixed income capability, will continue to oversee Australian Unity’s cash and fixed interest portfolios, as well as the other fixed income funds and mandates currently managed by Altius.
Australian Ethical chief executive, John McMurdo, said: “The acquisition of leading fixed-income fund manager Altius is another important milestone for Australian Ethical as we scale and broaden our investment capability consistent with our strategy and Ethical Charter. Transactions such as this add to our momentum as a purpose-driven business and our ability to deliver sound investment returns while influencing progress towards a better future for people, animals and planet.”
Altius’ co-founder and chief investment officer, Bill Bovingdon, said: “We are excited by the opportunity to join Australian Ethical, the market-leading ethical investment platform, and to combine Altius’ deep expertise in responsible fixed income with Australian Ethical’s ethical investing heritage across asset classes.
“Naturally, clients will be at the centre of our considerations as we work closely with Australian Unity on a successful transfer of funds.”
In its results for the six months to 31 December, Australian Ethical said net profit after tax (NPAT) was $6.2 million, up from $1 million in the first half of 2023. Revenue was $48.5 million, and the firm said it is targeting $100 million in annualised revenue by the end of FY24, subject to market conditions.
Funds under management were $9.6 billion, up 15 per cent, thanks to total net flows of $259 million as well as positive investment performance. Some 41 per cent of this is in its domestic equities funds, with 23 per cent in international equities.
