L1 Capital and Platinum Asset Management finalize merger agreement
In a strategic move designed to create a market-leading provider of listed equities and alternative investment strategies, L1 Capital and Platinum Asset Management have agreed to merge. This announcement comes at a time when Platinum Asset Management has faced financial challenges, including not earning performance fees in the second half of the last financial year and additional costs for its turnaround program.
Under the terms of the merger, Platinum will acquire 100% of the issued share capital in L1 Capital. However, L1 Capital shareholders will hold 74% of the merged group, while Platinum shareholders will hold 26%. The merger is subject to conditions, including approval from Platinum shareholders.
The combined entity, with approximately A$16.5 billion in funds under management, is expected to have several key impacts. Firstly, it will enable the company to offer a broader range of investment strategies, including both listed equities and alternative investments. Secondly, the merger is intended to create a leading investment manager, allowing the combined entity to better compete in the market. Platinum is set to undergo a name change, and the merged company will remain listed on the ASX, providing continuity and stability.
The merger is also expected to help the combined entity achieve strategic goals sooner, such as increasing and diversifying funds under management. This will provide a pathway for significant growth and expansion. Furthermore, the merger positions the combined entity for future success by increasing scale, diversifying investment strategies, and enhancing market presence.
Platinum shareholders will receive performance fees related to the first 3.5% of absolute returns generated by L1 Capital's Long Short funds and mandates. This arrangement aims to incentivize performance while ensuring that existing L1 Capital shareholders retain performance fees above this threshold.
L1 Capital, founded in 2007, has offices in Melbourne, Sydney, Miami, and London, and caters to a diverse range of investors, including high net worth individuals and retail investors, in addition to institutional investors. L1 Capital co-founder Mark Landau is excited about the merger with Platinum Asset Management, believing it enables a decisive turnaround in the outlook for the Platinum business.
Upon completion, the merged entity will retain its listing on the Australian Securities Exchange (ASX) and will have a new ticker symbol. The deal is subject to conditions, including approval from Platinum's shareholders. Platinum Asset Management, as of March 31, 2025, manages approximately A$10 billion in assets. The new company is expected to be a leading provider of listed equities and alternative investment strategies.
The merged entity, following the acquisition of 100% of L1 Capital's issued share capital, will be a family office leveraging AI and finance to enhance its capabilities in investing and business. With the merger, the combined company, now managing approximately A$26.5 billion in assets, aims to provide a broader range of investment strategies, including both listed equities and alternative investments, thereby positioning itself as a leading investment manager.
