Finely crafted investments



Mattioli Woods Acquires 49% of Amati

Posted by Douglas Lawson on 12/Apr/2017

In February, we announced that Mattioli Woods, an AIM listed wealth management and employee benefits business, had acquired a 49% stake in Amati Global Investors. We have been pleased at the positive response to the announcement. But some of our stakeholders, including advisers, investors and suppliers, have rightly asked us why we chose this path.

Whilst we are a small business, we have always been well capitalised and profitable and, therefore, were under no pressure to seek a partner with deep pockets or greater resources than our own. We have also enjoyed the freedom that comes with running an independent business – this freedom can facilitate quick and decisive decision making and allowed us to develop Amati in a way that was consistent with our culture and values. Finally, we felt fully aligned with the investors in our funds as, not only do we invest in the products that we manage, we also own the business that will prosper through the successful management of these products. Given all these factors in favour of continuing as an independent entity, why did we choose to partner?

When we began our discussions with Mattioli Woods, the most important consideration for us was that they are like-minded people, and that those factors that were most precious to us and that had contributed to the success of the business to date could be maintained. That is to say, we felt it was crucial to continue to operate Amati and the Amati funds as we had done since the creation of the business in 2010 – the same team, the same brand and the same strategy. This was not only accepted but was encouraged by Mattioli Woods, who had no desire to change a formula that appeared to be working. Rather, they felt that they could offer advantages that would enhance our ability to deliver on that strategy.

The first and most obvious advantage that Mattioli Woods can offer is assistance in navigating the changing regulatory environment. These changes (whether they be from MiFID II, MiFIR, PRIIPS, SMCR or GDPR) are unprecedented in number and scope, and present challenges for the whole investment industry and we feel better placed to deal with these with the support of a larger group and all the additional resources at their disposal. Besides regulation, assistance in helping the Amati funds reach a wider investment audience was another attraction. A small fund manager is likely to be constrained in its ability to market its funds. Whilst you are unlikely to see Amati branding on the side of any taxis any time soon, we believe we will see the benefits of the marketing and communications platform that Mattioli Woods can offer. Another factor that helped us reach our decision was the engagement with Mattioli Woods' own investment management operation to compare our macro perspectives, which in turn help to shape portfolio management decisions. Finally, this combination helps to address the disadvantage that any small business will suffer from, which is the reliance on a small number of individuals. We now feel that we are better equipped to cope in the event of the loss of a 'key man'.

Negotiating a transaction of this nature can be a laborious process but is one that gives you an opportunity to become very well acquainted with the party on the other side of the table. This process of getting to know the other side can be as important as the financial, legal and commercial due diligence. It is these interactions that allow the seller and the buyer to determine whether they are dealing with people with whom they can enjoy an ongoing relationship. Over the course of our negotiations it became clear that Mattioli Woods was an organisation that, besides offering us comprehensive operational support, understood and shared the ambition and values of Amati.