Downing has agreed to sell its technology ventures division to Foresight, in a deal worth up to £17.8m.
The deal sees the infrastructure and private equity manager take over £275m worth of mandates, including the Downing One VCT and Downing Four VCT, as well as the Downing Ventures EIS Scheme.
The strategies are managed on behalf of 12,000 investors, with assets predominantly in the UK, as well as the US and Israel.
Downing began life as a VCT-focused house but, in recent years, has been rapidly growing its Fund Managers business, helmed by Judith Mackenzie.
The boutique has £400m in assets under management and has attracted heavy-hitters, including Rosemary Banyard and Simon Evan-Cook.
Foresight will pay an initial consideration of £13.6m and up to £4.2m over a three-year period, subject to certain criteria being met.
The deal will take Foresight’s VCT assets to £542m and boost its private equity assets under management to £1.2bn, a 30% increase from the end of March.
It marks its first M&A transaction since its IPO last year.
Bernard Fairman, executive chairman of Foresight Group Holdings Limited, commented: “The VCT and EIS businesses which we are acquiring are an excellent strategic fit for Foresight, complementing our existing portfolio and adding scale.
“We are investing in multi-stage, fast growing, scalable businesses with the potential to generate significant returns. The additional capabilities will deepen our retail investor offering and provide further opportunities for our extensive retail sales team to drive growth.
“We said at the time of our IPO that M&A would be a core part of our growth strategy and I am delighted that we are successfully delivering on that promise.
“This transaction represents a significant strategic step, taking Group AUM to over £9bn and private equity AUM to £1.2bn today, while also providing us with a broader set of funds and capabilities.”
The transaction is expected to complete by the end of June 2022.
See also: Judith MacKenzie: Downing Fund Managers can easily double in size in several years