Aberdeen agrees £85m deal with RBS for asset management arm
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Aberdeen Asset Management is to pay Royal Bank of Scotland £85m for around half of its asset management business.
The acquistion sees £13.5bn of assets pass to Aberdeen and includes the multi-manager and fund of hedge fund assets from RBS. Certain private equity and real estate fund of funds are also part of the deal, which is subject to regulatory approval and is set to conclude in the first quarter of 2010.
Aberdeen and RBS Wealth Management have also entered into a five-year distribution agreement upon completion of the deal. The agreement focuses around the fund of funds and multi-manager franchise, with Aberdeen looking leverage off the strength of the RBS Wealth Management private client franchise.
To re-finance the deal, which is for a cash consideration of £84.7m plus associated costs and regulatory capital, Aberdeen has announced a non pre-emptive placing of approximately 84 million new ordinary shares at 10p per share, which represetnts 8.3 per cent of Aberdeen’s current issued ordinary share capital.
Aberdeen Asset Management chief executive Martin Gilbert says: “Aberdeen has been looking for some time to establish a high quality platform in the alternatives arena, and this exactly fits our requirements. This is a well-run business with an excellent distribution network, which has delivered good performance over a number of years. This transaction fits with our corporate strategy, a key part of which has been to make earnings enhancing acquisitions to complement organic growth.
“The addition of this leading multi-manager and specialist alternatives resource will significantly strengthen our existing multi-asset and multi-manager capability, an area our clients are looking towards as part of their overall asset allocations.
“A further attractive aspect of this deal is the distribution agreement we have secured with RBS Wealth Management that adds to Aberdeen’s already significant global client reach.”
The acquisition is the second major deal Aberdeen has completed in the past couple of years. In December 2008, the firm acquired the majority of Credit Suisse’s fund management business in an all-share deal worth £250m. At the time of the deal, the multi-manager arm was to remain with Credit Suisse as part of its alternative solutions unit only to for the team, headed by Graham Duce and Aidan Kearney, to be acquired by Aberdeen in the summer of 2009.
RBS is expected to sell the remainder of the asset management business seperately.
RBS Group chief financial officer Bruce Van Saun says: “This transaction represents another step in our plan to restructure RBS around its core customer franchises. Aberdeen is a well regarded and well established global asset manager and will be an excellent new owner for the business. We look forward to building an ongoing relationship with Aberdeen primarily focused around the provision of RBS Asset Management’s funds of funds and multi-manager products.”
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