Aberdeen Asset Management has agreed a deal with Royal Bank of Scotland to buy part of its asset management business for £84.7m.
The acquisition sees £13.5bn of assets pass to Aberdeen, including the multi-manager and fund of hedge fund assets. Some 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 this year.
Aberdeen and RBS Wealth Management have also ent- ered into a five-year distribution agreement.
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.
“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.”
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 separately.
Singer Capital Management financials analyst Sarah Ing says: “This was reasonably well flagged. It was no surprise – fund of funds was something Aberdeen said it wanted to do in the longer term. For those reasons it appears to be sen- sible. We always knew it would be equity-funded but Aberdeen has raised a bit more equity than was needed, improving its gearing ratios.”