Boutique fund manager Liontrust has confirmed it is to acquire Neptune for £40m.
The deal will see Liontrust's assets under management increase by £2.8bn to a total of £17bn. As per the agreed terms, Liontrust will initially pay £35m in new shares of 1 pence each.
The asset manager would also pay up to an additional £5m in new shares, based on a certain future AUM level managed by the Neptune team.
The deal will enable me to step away from managing the business and focus solely on managing funds and leading my investment team, which is my real passion"
The entire Neptune investment team, including founder Robin Geffen, is to join the Liontrust office, based near London's Covent Garden. Under the deal, Geffen will step down as chief executive to focus on leading the team and managing his funds.
Robon Geffen said the decision to sell Neptune has been an easy one. "The deal will enable me to step away from managing the business and focus solely on managing funds and leading my investment team, which is my real passion."
Liontrust chief executive John Ions said: "Neptune is a great acquisition for Liontrust and will enhance our already excellent investment proposition in areas where there is strong demand such as global equities, equity income and emerging markets equities.
"We have created an environment to give fund management talent with robust and repeatable investment processes the best possible opportunity to deliver good, long-term returns for our clients. Robin and the rest of the team at Neptune will be able to focus on managing their funds and not be distracted by other day-to-day aspects of running a business."
Reorganising Neptune is said to cost Liontrust around £16m, with nearly £2m in transaction costs.
The transaction, which is subject to regulatory nod, forms part of Liontrust's strategy to diversify its product line-up and drive growth.
The largest fund under management at the firm is Neptune Balanced, with £417m under management, followed by Neptune Japan with £307m of assets. Neptune Balanced has posted year-to-date gains of 13.5%, according to Morningstar data.