Aberdeen, SVG create £4.7bn fund of funds business


pound_money_170sqUK-based Aberdeen Asset Management has created a £4.7bn private equity fund of funds business by agreeing to purchase just over 50 per cent of SVG Capital subsidiary SVG Advisors for £17.5m.

The move is a massive boost to Aberdeen’s own fund of funds assets under management, which currently stand at about £700m.

SVG Capital chief executive Lynn Fordham will lead the combined business, which has been named Aberdeen SVG Private Equity.

Aberdeen has the option of picking up the remaining 49.9 per cent of the new business at any point after the third anniversary of the completion.

That deal could fetch between £20m and £35m depending on the value of the business at the time the sale is made.

Aberdeen chief executive Martin Gilbert said, “SVGA’s considerable experience and track record, combined with Aberdeen’s own asset management expertise and global distribution network will position us well to meet demand from investors seeking exposure to private equity.

“Institutional investors are increasingly looking towards alternative asset classes, including private equity, to diversify their portfolios and offer additional sources of alpha.”

The deal is expected to close in the first half of this year.

Aberdeen is currently running a strategy of buying smaller businesses to “enhance and accelerate” its own growth.

The firm also revealed it has agreed to buy listed asset management company Artio Gobal Investors for £122m.

Debt-free Artio had a NAV of £90m at the turn of the year and cash and seed investments of £87m.

Aberdeen said it made the deal to expand its North American business, deepen its distribution network in the region and add to its existing fixed income capabilities.

That deal is currently expected to close by the end of the second quarter or early in the third quarter of 2013.

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