L1 Capital, Platinum merger inches closer to reality

L1 Capital and Platinum Asset Management are looking to finalise the terms of their potential merger.

Following due diligence, L1 Capital and Platinum have slightly adjusted the terms of their agreement.

In May, when the merger was first announced, discussions were being had on the basis that L1 Capital shareholders would own about 75% of the shares in Platinum at the completion of the deal. This has now dropped to 74%, while Platinum shareholders will own 26%.

This split was on the basis that the combined entity would be able to participate in the performance fees related to the first 5% of absolute returns generated by the L1 Long Short funds with anything over that going to L1's shareholders. Now, the combined entity will receive 3%, with the excess going to L1 shareholders.

The parties are now looking to finalise the Merger Implementation Deed, with Platinum saying it still believes the move would deliver shareholder value.

Once combined, the firm would have about $18 billion in funds under management.

Some $8.3 billion of this would come from Platinum, which is about $1.3 billion less than it had when the merger was first flagged.

In May, an institutional client terminated a mandate valued at $958 million, while another institution redeemed $360 million. The manager also had net outflows of $293 million.