Colonial to stay in UK with Ivory deal

A range of UK investment products are expected to become available in Australia with Colonial’s latest acquisition, a Scottish fund manager.

A range of UK investment products are expected to become available in Australia with Colonial’s latest acquisition, a Scottish fund manager.

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Colonial has bought Stewart Ivory, a privately owned fund manager based in Edinburgh, for $183.2 million. The Scottish manager currently has $7.7 billion under management which brings Colonial’s total funds under management in the UK to $13 billion.

As part of the deal, Stewart Ivory staff will be paid $73 million during the next five years for their 75 per cent stake in the company. The seven directors will share almost $5 million immediately.

The remaining shares are owned by one of Stewart Ivory’s own investment trusts — the Scottish American Investment Company.

Colonial chief executive officer Peter Smedley says the acquisition will give the Australian fund manager a strong base to grow its international funds management business.

“By preserving and growing the existing Stewart Ivory business, Colonial will expand its UK investment team and gain access to new products and markets,” he says.

Stewart Ivory has both retail and wholesale clients and the product range includes retail investment trusts, UK authorised unit trusts and private client and segregated mandates.

The investment style for the Scottish manager is bottom-up with a strong research-driven process.

In addition, Stewart Ivory’s joint venture with David L Babson provides distribution opportunities in the US. This joint venture has $2.4 billion of funds under management.

The purchase of Stewart Ivory is being funded internally and brings Colonial’s funds under management to $55 billion globally.

It follows weeks of speculation in the UK that Colonial may be looking to exit the UK market. The group announced earlier last month that it was considering the sale of its British insurance, pensions and lending business after an approach by major UK listed company Countrywide Assured Group.