London-based investment firms River and Mercantile and P-Solve, are merging to create a diversified investment business, branded as the River and Mercantile Group.

London-based investment boutique River and Mercantile and P-Solve, the investment consultancy and solution provider, are to merge, creating a diversified, client-led investment business. The new business will be known as River and Mercantile Group.

The group said it will aim to grow through the continued development of divisions formed by the two businesses, while also developing new services aiming to deliver on specific outcomes in both institutional and retail markets.

Mike Faulkner will be chief executive of the combined group and James Barham will continue to head the equity management business and will also take on a group-wide role as head of distribution.

Pacific Investments (the majority shareholder in R&M) and Punter Southall Group (the owner of P-Solve) will remain strategic shareholders in R&M Group. All management and key staff will retain equity interests in R&M Group.

With the merger R&M will be able to extend its business beyond equities, and offer structured equity, multi-asset class and derivatives capabilities. Similarly, P-Solve can further develop its asset allocation and derivatives capabilities, while leveraging R&M’s execution platform.

“This takes us forward significantly in our ability to continue enhancing the level of service we provide to our clients. This is both in terms of the expanded flexibility it will give us in developing investment solutions, and the depth of investment thinking that will exist in the combined business,” said Mike Faulkner, PSL CEO.

The group added that it will also explore the possibility of an IPO to raise capital for further investment in this growth strategy. The merger is still subject to regulatory approval from the FCA.

As at end December 2013, R&M managed assets in excess of £2.1 billion ($3.5 billion), including assets in transition, while P-Solve had an estimated £31.5 billion of assets under advice and £8.2 billion of assets under management.