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Pendal completes strategic acquisition of US-based Thompson, Siegel & Walmsley

July 23, 2021


Pendal Group (ASX:PDL) has announced the completion of its acquisition of US-based value-oriented investment management company, Thompson, Siegel & Walmsley LLC (TSW).

Highlights:
  • 96% of TSW client consent to the acquisition secured and expect to achieve 100% consent shortly after close.
  • Early completion achieved – reflecting the cultural and commercial alignment of both teams and the strong mutual commitment to realise the growth opportunities ahead.
  • John Reifsnider, TSW CEO, to lead Pendal’s consolidated US business and joins the Pendal Group Global Executive Committee.
  • Step change in Pendal’s FUM: more than doubling US FUM to A$62.5 billion (US$47.0 billion)* and increasing total Group FUM by 31% to A$139.3 billion.
  • Expected to be double digit EPS accretive in the first full year, post completion.

PENDAL Group CEO, Nick Good (pictured), said: “We are thrilled to welcome the TSW team and its clients to Pendal Group.

“Client support has been incredibly strong, with 96% TSW client consent received in just 11 weeks. It is testament to the compatibility and drive of the two organisations and their teams that we have completed the acquisition well ahead of original expectations.

“As a result of the acquisition, we will double our addressable market in the US and extend our ability to generate new FUM through the distribution of both TSW and JOHCM products across an expanded global network.

“Today, John Reifsnider becomes the new leader of the combined US business. John and I have worked closely together to complete the transaction expeditiously, cognisant of the importance of client and team support for the go-forward proposition. I am very pleased that John will be taking on this key role.”

Mr Reifsnider said: “The team and I are more convinced than ever of the merits of bringing together these two culturally aligned and forward-looking businesses.

“We believed from the outset that both organisations are a natural fit with compatibility in investment philosophy, client service and our entrepreneurial approach.

“The teamwork in delivering early completion and client consent is validation of this view and bodes well for future success.”

Broader range of product solutions

Mr Good commented: “This acquisition significantly broadens the range of product solutions we can offer clients via an expanded distribution network, and we are focused on providing our combined investment strategies to our enlarged client base as soon as possible.

“Both organisations share a core belief in investment team autonomy, and TSW’s investment autonomy will be preserved, an important consideration for our clients.

“As complementary businesses, with almost no overlap of investment strategies, together, we will be better placed to take advantage of the growth opportunities we see in the US market.”

There was strong support for the acquisition from Pendal’s institutional and retail shareholders and as a result, the successful Placement and Share Purchase Plan raised A$380 million in total.

This equity raising reduced the debt and balance sheet funding which was required to complete the transaction to A$57 million (US$44 million). This outcome provides additional balance sheet strength and capacity for Pendal to accelerate its growth opportunities.

Mr Good concluded: “The acquisition has delivered immediate value for our shareholders and a step change in Pendal Group’s diversification, scale and client offering.

This creates enhanced opportunities for growth, particularly with increasingly positive investor sentiment, a flourishing US economy and the global economic rebound.”

* Includes TSW FUM of US$24.6 billion (A$32.6 billion). Based on exchange rate of AUD:USD of 0.7518 at 30 June 2021.

Visit Pendal’s shareholder website for more information.

About Pendal

Pendal Group (“Pendal”) is an independent global investment manager focused on delivering superior investment returns for clients through active management. Pendal manages A$106.7 billion in FUM (as at 30 June 2021) in client assets through J O Hambro UK, Europe & Asia; JOHCM USA; Pendal Australia and Regnan.

Pendal operates a multi-boutique style business delivering superior results across a global marketplace through a meritocratic investment-led culture. Its experienced, long-tenured fund managers have the autonomy to offer a broad range of investment strategies with high conviction based on an investment philosophy that fosters success from a diversity of insights and investment approaches.

Listed on the Australian Securities Exchange since 2007 (ASX: PDL), the company has offices in offices in Sydney, Melbourne, London, Prague, Singapore, New York, Boston and Berwyn, Pennsylvania in the US.

About Thompson, Siegel and Walmsley (TSW)

TSW is a US-based value-oriented investment management and advisory company, operating primarily in the long-only equity (International and US) and fixed income asset classes with US$24.6 billion (A$32.6 billion) of FUM as at 30 June 2021.

Established in 1969 and headquartered in Richmond, Virginia, the company has a well-known record in attracting and retaining investment talent, with an average tenure of 12 years among the investment team members.

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