MONEY manager Aberdeen Asset Management hit the acquisition trail yesterday, bolting on a US fund manager and taking a 50 per cent stake in a private equity unit.
The investment house, which has had a stellar market run over the year, with its shares increasing 64 per cent, agreed to buy listed fund manager Artio Global Investors for $175m (£112m), a £22m premium on the firm’s share price.
In a separate deal, Aberdeen has also snapped up a 50.1 per cent stake in SVG Advisers from its parent, FTSE listed firm SVG Capital. Aberdeen is paying some £17.5m for the outfit.
The buys will hearten shareholders keen to see how management handles the next stage of the company’s growth, after a blockbuster 2012. Investors rallied to the deal yesterday, sending Aberdeen shares up 2.4 per cent to a new high of 426.5p.
The business, which started life in the granite city, had amassed a net cash warchest of £224.5m according to analysts before today’s deal, leading to speculation about what the company would do with its cash pile. Analysts now expect remaining cash reserves of £50m. Chief executive Martin Gilbert said no more deals were imminent.
The purchase with Artio will see Aberdeen add £9.2bn to its assets under management, while the SVG deal will add about £4bn.
SVG Advisers has a put and call option to sell its remaining stake to Aberdeen in three years’ time.
Gilbert told City A.M. the firm would have liked to acquire the full ownership of the unit outright.
The tie-up will marry SVG Advisers private equity funds with Aberdeen’s distribution platform.
ADVISERS ABERDEEN ASSET MANAGEMENT
JP MORGAN CAZENOVE
Aberdeen Asset Management, which has bought US fund manager Artio and half of private equity unit SVG Capital, drew on its house broker JP Morgan Cazenove to advise it on the acquisitions.
Leading the deal team was Conor Hillery, a managing director of corporate finance at the investment bank, who moved to work at Cazenove when it was a standalone entity in 2001. He moved into JP Morgan when the two joined forces in 2004.
Hillery has been lead adviser for a number of other money manager related transactions over the years, including Friends Provident Group’s de-merger from F&C Asset Management in July 2009.
Most recently he was involved in the rights issue of pension consolidator Phoenix Group to raise £250m and also helped broker a rights issue by underwriter Catlin. Hillery originally qualified as a chartered accountant in Dublin while working at KPMG before moving over to London in order to pursue a career in investment banking. Also working on the deal from JP Morgan alongside Hillery was Usman Khalid. Willkie Farr & Gallagher LLP was used to act as Aberdeen’s US legal adviser for its purchase of Artio, which is based in New York.