F&C Asset Management and its private equity subsidiary, ISIS Equity Partners, will create a new limited liability partnership to manage the group’s private equity investments.
ISIS Equity Partners (ISISEP) will assume the management of circa £500m of private equity assets and continue to operate out of existing offices in London, Birmingham and Manchester. All ISIS staff will transfer on completion of the transaction, which is expected later this month.
Howard Carter, chief executive officer of F&C Asset Management, said the move had been driven by the introduction of International Financial Reporting Standards (IFRS).
“The introduction of IFRS has important implications for financial institutions, which have captive private equity operations since IFRE requires investee companies to consolidate financial reporting in line with the ultimate shareholder,” Carter said. “Following extensive consultation, we have concluded that this would not be in the best interests of F&C, Friends Provident, ISISEP nor the portfolio of investee companies.”
ISISEP will no longer be consolidated in F&C’s report and accounts following the changes. It will instead become F&C’s ongoing partner for private equity products.
“The relationship between F&C and ISIS Equity Partners is strong and ongoing as our status moves from subsidiary to partner. This is not an earn-out. Institutional clients and VCT boards have been fully consulted,” said Wol Kolade, managing director of ISISEP.
ISISEP has meanwhile opened a new office in Leeds. The team there will be headed by Andy Lees, who joins from Aberdeen Murray Johnstone’s Manchester office. Prior to joining Aberdeen Murray Johnstone, Lees was a director of corporate finance at Ernst & Young, where he spent eight years advising on private equity transactions.
James Hall from ISISEP’s Manchester office is also joining the new team. He has nine years’ private equity experience.
ISISEP has a team of 21 investment professionals. Other appointments are pending. F&C Asset Management was created on October 11 2004, from the merger of F&C (Group Holdings) Ltd and ISIS Asset Management PLC. It manages assets to a value of £124.8bn for institutional, insurance and retail clients.