Multi-disciplinary ABS announces intention to float

Hudson: Ultimate owner of group

A City law firm that describes itself as an asset management consultancy, providing a wide range of services to alternative fund managers and asset owners, has notified its intention to float on AIM.

MJ Hudson, which became an alternative business structure (ABS) in 2014, has not yet specified how much it intends to raise, or when. It will become the seventh listed law firm.

It provides services through three interconnected divisions: advisory, business outsourcing, and data and analytics.

The notice filed with the London Stock Exchange said that, across these three divisions, the group offers multiple services, including legal, investment advisory, fund and company administration, benchmarking, investor relations, fund administration, regulatory and risk advice.

Charles Spicer has been named its non-executive chairman. A businessman operating mainly in the healthcare sector, Mr Spicer is chair of listed companies Creo Medical and IXICO among other appointments.

MJ Hudson was set up purely as a law firm in 2010 with private equity loans rather than stakes – as ABSs were not permitted at the time.

Among the current shareholders in the UK holding company is Gresham House Strategic plc, which invests in smaller public companies. Gresham describes the holding as a pre-IPO stake.

The UK holding company is in turn owned by a Jersey-registered company, MJH Group Holdings, which is owned by founder and chief executive Matthew Hudson.

MJ Hudson has steadily expanded into non-legal services – in 2016 we reported its acquisitions of investment advisory firm Allenbridge, and outsourced fund management provider Tower Gate Capital.

The firm employs nearly 200 people, and its legal business recorded a profit of £482,000 on a turnover of £9.4m in the year to 30 June 2019.

Other parts of the group also bring in substantial income – MJ Hudson Fund Management Ltd, for example, made £4.8m in the year, with a gross profit of £1.3m and pre-tax profit of £153,000.

At the time of the 2016 deals, Mr Hudson said: “Our goal is to build the pre-eminent advisory and infrastructure business in alternative assets. This strategy is driven by three strong trends: the continuing growth in importance of alternative assets in investment portfolios, the increasing information requirements of fund investors and fund managers and the mounting pressure from investors, regulators and legislators for a more sophisticated and well-governed manager and fund infrastructure.”

Meanwhile, two ABSs owned by listed accident management firm Redde plc – NewLaw Solicitors and Principia – are set to benefit from a much increased referral network after the company announced plans to merge with Northgate, a listed light commercial vehicle hire business.

They told the market that “the UK mobility and automotive services sector is a structurally attractive yet highly fragmented market with opportunities to remove inefficiencies that would enhance the customer proposition and unlock value for shareholders”.

The announcement said: “Redde has developed a unique skill set in delivering replacement mobility and repair services into the insurance market and the wider automotive space through its fleet incident services. Redde has captured a large share of that market and with a bigger platform, can deliver further services valued by its customers.

“Similarly, Northgate is a market leader in rental and hire of light commercial vehicles that operates in a different market space to Redde and provides a complementary and adjacent product offering.

“Combining some of the operational aspects of the respective businesses unlocks value and extends the product and service reach, enhances operational capability and generates better purchasing economics.”

Redde’s most recent results showed record revenues of £590m; Northgate’s was £746m and its shareholders will have 54% of the combined business.

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