Aberdeen Asset Management acquires Artio Global Investors, SVG Advisers

Martin Gilbert
Martin Gilbert: “The integration of Artio's operations will strengthen further our U.S. fixed-income expertise, in particular the addition of U.S. total return and global high-yield products”

Aberdeen Asset Management agreed to acquire Artio Global Investors, adding about $14 billion in assets under management primarily in fixed income and international/global equities, according to announcements by both companies Thursday.

Separately, Aberdeen AM announced plans to acquire a 50.1% stake in SVG Advisers, a private equity fund-of-funds manager with about £4 billion ($6 billion) in AUM.

Aberdeen AM plans to pay $175 million for Artio Global, the troubled fund manager that has seen its AUM drop to $14.3 billion as of Dec. 31 from $53.4 billion at year-end 2010. The price tag includes Artio's net asset value of $141 million in cash and seed investments, representing a premium of about $34 million.

“The integration of Artio's operations will strengthen further our U.S. fixed-income expertise, in particular the addition of U.S. total return and global high-yield products,” Martin Gilbert, CEO of Aberdeen AM, said in a prepared statement.

In its annual report released Thursday, Artio reported that AUM dropped by 53%, or $16.1 billion, for the year ended Dec. 31. Compared to the previous quarter, AUM at the end of the fourth quarter had decreased by 19%, or $3.3 billion. Outflows in both periods were predominantly in international equity strategies, according to the report.

In a conference call for analysts, Mr. Gilbert said outflows from international equities will continue and the purchase price reflects those expectations. He emphasized that one of the main attractions of Artio is its distribution network, “which is complementary to ours, and enhances our distribution in the U.S.”

Aberdeen agreed to pay £17.5 million in cash for the stake in SVG Advisers and combine the company with its own private equity capabilities. The new business, which will have about £5 billion in AUM, will be renamed Aberdeen SVG Private Equity.

SVG's “considerable expertise combined with our own asset management expertise and distribution” will position the firm to meet investors' demand in seeking exposure to private equity, according to Mr. Gilbert. “We should see growth in AUM” as a result of the transaction, Mr. Gilbert said in the conference call.

Both transactions are expected to close within the next several months.