Australian Ethical Investment announced that the acquisition of Altius Asset Management by Australian Unity had successfully completed on Wednesday.

In May, the firm first entered into a binding agreement to acquire Altius, noting that the deal would increase funds under management (FUM) by about $2 billion to $12.3 billion.

John McMurdo, chief executive of Australian Ethical, said the deal marked an important step in the successful execution of its growth strategy.

"Altius is a leading purpose-driven fixed income manager with a team of six that will deepen our fixed income investment capability and ability to deliver robust investment returns while influencing a better future for people, the planet and animals," McMurdo said in a statement to the ASX.

"While we welcome the Altius team, we would like to thank Australian Unity for their continued support and partnership as we integrate the Altius business over the coming months."

Australian Ethical clarified in May that it would pay Australian Unity $4.25 million in cash after the deal closed. An additional $1.25 million will be paid if the Australian Unity investment meets certain transition steps and maintains agreed minimum FUM targets.

Albeit at a lower revenue margin consistent with the fixed income asset class, the transaction is expected to generate around $1 million of EBITDA in fiscal 2024-2025.

In addition, Australian Unity will also become one of Australian Ethical's largest institutional clients.

Namely, Altius will continue to oversee Australian Unity's cash and fixed income portfolios, as well as the other fixed income funds and mandates currently managed by Altius.

On joining the firm, Altius co-founder and Chief Investment Officer Bill Bovingdon said: “The Altius team is excited about the opportunities ahead – combining our deep experience in responsible fixed income with Australian Ethical's strong ethical heritage across multiple asset classes will enable to deepen customer relationships and support further growth.”

Under the terms of the deal, Bovingdon, along with co-founders Chris Dickman and Gavin Goodhand, will join the Australian ethical investment team under the leadership of Chief Investment Officer Ludovic Theau.

In its full financial report for the year ending June 30, Australian Ethical reported 13 per cent growth in funds under management (FUM) to a record $10.4 billion.

At the time, it clarified that figure included the full-year impact of Christian Super SFT, but not the Altius acquisition.

However, it said the next financial year will focus on integrating the firm and executing key strategic initiatives.

"The expected completion of the Altius acquisition in September 2024, as well as continued organic growth and an increase in the retirement guarantee rate, are expected to support further FUM growth in FY25."