Aberdeen Asset Management has pulled off its fourth deal this year in the alternative finance space with the acquisition of Advance Emerging Capital.
Martin Gilbert's deal-hungry group, whose share price is under pressure from the negative sentiment towards emerging markets, has been bolting on small specialist managers to widen its offering for investors looking for diversification.
London-based AEC manages £409million largely in two investment trusts, Advance Developing Markets and Advance Frontier Markets, which invest in other investment trusts. It also manages a range of open-ended fund-of-fund vehicles.
Aberdeen said following the transaction it would be managing 33 closed end funds with aggregate assets under management of over £8.5 billion out of its £307billion total. Its alternatives team under Andrew McCaffery now manages over $30bn (£18bn).
Chief executive Mr Gilbert commented: “The acquisition of Advance Emerging Capital brings to Aberdeen a dedicated and highly experienced fund management team, expands further our closed end fund business and adds to the range of alternative investment capabilities we already offer. AEC investors will benefit from the management team being part of a larger, independent asset manager and the ability to draw on the group’s established distribution and operational expertise in regard to closed end funds.”
Andrew Lister, co-chief investment officer of Advance Emerging Capital, said:
“Aberdeen is an investment house we have immense respect for, and with which we share a similar investment philosophy and appreciation of the benefits of the closed-end fund structure."
Earlier this month Aberdeen completed the acquisition of FLAG Capital Management, a diversified private markets manager with offices in Stamford, Boston, and Hong Kong.
It said the acquisition, together with this year's buyout of its joint venture with SVG Private Equity, meant it joined an elite of private equity managers with investment professionals on the ground in the world’s major markets – boasting a team of 50 across the US, Europe and Asia.
That followed the announcement in August that Aberdeen was buying Arden Asset Management, a specialist hedge fund manager with offices in New York and London and clients spanning corporate and state pension plans, sovereign wealth funds, global bank platforms and retail investors.
The group stressed the acquisitions were "part of Aberdeen’s strategy to grow its alternatives business via multi-manager hedge funds, property and private market allocations, direct infrastructure investments and pan-alternative capabilities".
Jason Hollands, managing director at Tilney Bestinvest, commented that the recent deals marked a move away from Mr Gilbert's previous "industrial-scale" acquisitions such as that of SWIP.
He said: "In contrast deals like today's appear relatively low risk, with apparent continuity in the investment process and team. A key priority today will be to satisfy the major shareholders in Advance's investment companies that the investment proposition will remain unchanged but there will be additional benefits from access to Aberdeen's operational infrastructure and distribution capabilities."
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