ABERDEEN Asset Management (Aberdeen) is strengthening links with major shareholder Phoenix Home Life by transferring the management of #478m of funds invested in the US on behalf of UK clients to its Connecticut-based ally.
The move is in line with Aberdeen's policy of having money managed close to the financial markets in which it is invested. It also solves Aberdeen's problem of having to rebuild its London-based US equities team following the departure a few months ago of Alan Torry, who led this department.
In return, Aberdeen is appointed sub-adviser to another $567m (#348m) of funds managed by mutual life office Phoenix for US clients.
Aberdeen's chief executive, Martin Gilbert, said these funds were invested mainly in UK and Continental European equities.
The Scottish investment house already acts in a sub-advisory capacity to other Phoenix funds.
Gilbert said: ''We will obviously pay them a fee for the money they manage on our behalf. We will receive a fee for the money we manage on their behalf.
''We bring in more revenue than we pay out.''
Aberdeen's link-up with Phoenix forms the main plank of its efforts to break into the lucrative US fund management market. It has recently brought in about #25m of funds through this channel.
Phoenix has a 10% stake in Aberdeen, with the ability to increase this to 20%.
The #478m being transferred to Phoenix for management relates to everything Aberdeen has invested in the US, except for about #75m of technology funds.
Most of the Aberdeen funds being transferred to Phoenix will be managed by a Chicago-based team headed by Ray Urban, who has 26 years of investment experience.
Urban will assume responsibility for Aberdeen Prolific North American Unit Trust, the Dublin-based Aberdeen Prolific American Growth fund, Luxembourg-based Aberdeen Atlas United States Portfolio, and the US portions of international funds and other institutional funds managed by Aberdeen.
Phoenix's Florida-based value management team, led by Christian Bertelsen, will manage Aberdeen Prolific American Opportunities Unit Trust. Aberdeen, which last year acquired life office Scottish Provident's Prolific asset management business, will be granted access to Phoenix's expertise in managing its US technology funds.
The investment house revealed last week that it had won nearly #1000m of new funds in the first seven-and-a-half months of its financial year, as it unveiled a doubling of interim pre-tax profits to #7m before exceptionals.
Its funds under management had risen by 14.5% to #13.4bn by the halfway stage.
n The Scottish Investment Trust narrowly outpaced its new benchmark with a 19.5% lift in net asset value in the six months to April 30, and now has assets worth #1300m. It has raised the interim dividend by 4.4% to 2.15p.
The trust is using a new benchmark made up of 50% of the UK's all-share index and 50% of the FT/S&P Actuaries World (ex-UK) index.
Chairman Sir Angus Grossart said the trust had maintained full exposure to Europe, which had risen by 31% in sterling terms, and to the UK and US, up 21.6% and 22.5% respectively.
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