Platinum Asset Management and L1 Capital have announced the binding terms of their combination, which will see the creation of a merged group called MergeCo. The combined entity is expected to have approximately $16.5 billion in funds under management. Platinum Asset Management is an Australian funds management company that specialises in investing in international equities. L1 Capital is a global investment manager focusing on alternative investment strategies, including long short equities and real assets.
The merger is subject to the satisfaction of specific conditions, including approval from Platinum shareholders. Upon completion, Platinum will acquire 100 per cent of the issued share capital in L1 Capital, in exchange for the issuance of new Platinum ordinary shares to L1 Capital’s existing shareholders. Following the completion of the merger, L1 Capital shareholders are expected to hold 74 per cent of the issued share capital in the merged group, with existing Platinum shareholders holding the remaining 26 per cent.
Under the merger terms, Platinum shareholders will receive performance fees related to the initial 3.5 per cent of absolute returns, before management fees, generated by L1 Capital’s Long Short funds and mandates. L1 Capital shareholders will retain performance fees exceeding the initial 3.5 per cent of absolute returns for their Long Short funds and mandates.
Platinum’s chairman, Guy Strapp, said the Platinum board unanimously believes the transaction is in the best interests of shareholders. He added that the combination with L1 Capital is seen as a catalyst for delivering strong outcomes for both shareholders and investors, creating a high-quality manager with world-class investment talent and significant scale.
