River and Mercantile and P-Solve to merge, creating a diversified investment business under the River and Mercantile brand

R&M Group will seek to grow through the continued development of the divisions formed by the two already successful businesses. In addition, it will develop new services that leverage the equity management skills of R&M, together with the asset allocation and derivative management skills of PSL. These services would aim to deliver on specific outcomes, consistent with the prevailing trend towards these types of mandates in both institutional and retail markets.

Pacific Investments (the majority shareholder in R&M) and Punter Southall Group (the owner of P-Solve) will remain strategic shareholders in R&M Group. All management and key staff will retain equity interests in R&M Group. The merger has the strong support of management in both businesses and their strategic shareholders.

Mike Faulkner will be CEO of the combined Group and James Barham will continue to head the equity management business and will also take on a Group-wide role as head of distribution.

The merger will benefit both businesses:

  • For R&M, it creates the natural extension to its business beyond equities, which has always been part of its stated strategy. It will now also be able to offer structured equity, multi-asset class and derivatives capabilities
  • For P-Solve, it provides greater ability to develop its asset allocation and derivatives capabilities. It also provides the ability to leverage R&M’s execution platform, where appropriate, to support the delivery of solutions.

The merger is subject to regulatory approval from the FCA.

R&M Group will also explore the possibility of an IPO to raise capital for further investment in its growth strategy.

James Barham, R&M CEO, said: “This merger ensures that we are true to our founding principles, aims and objectives. This will accelerate our plans to develop a broad-based, diversified business where investment sits at the heart of our firm. We will have a strengthened platform from which to work and support our clients and consultants and I look forward to working with the new management team to achieve our common goals.”

Mike Faulkner, PSL CEO, said: “This takes us forward significantly in our ability to continue enhancing the level of service we provide to our clients. This is both in terms of the expanded flexibility it will give us in developing investment solutions, and the depth of investment thinking that will exist in the combined business.”