Aberdeen Asset Management will acquire U.S. and Hong Kong-based private equity and real assets funds-of-funds manager FLAG Capital Management, in a deal that will expand Aberdeen's presence in the U.S. market.
Aberdeen, which has £331 billion ($521.2 billion) in assets under management, will acquire FLAG to grow its global alternatives platform. FLAG has private equity teams and offices in the U.S. and Asia.
The deal is expected to close in the third quarter and is subject to regulatory approval from the Hong Kong Securities and Futures Commission and the submission of a filing with the U.S. Department of Justice and the Federal Trade Commission. Terms were not disclosed.
The agreement will add $6.3 billion of invested and committed capital to Aberdeen. FLAG focuses on venture capital, small- to midcap private equity and real assets in the U.S., and private equity in the Asia-Pacific region. Once the deal is closed, the business will be fully integrated into Aberdeen's private markets capability, increasing private equity assets under management to $15 billion, and investment staff to 50.
A spokesman for Aberdeen said FLAG has 23 investment staff — 15 in the U.S. and eight in Asia. The entire 63-strong team at FLAG will be integrated within Aberdeen.
“FLAG deepens and expands our U.S. client base, which is a key growth market for Aberdeen,” said Martin Gilbert, CEO of Aberdeen Asset Management, in a statement Wednesday. He added the acquisition will strengthen the firm's private market capability “by bringing additional Asian expertise and new U.S. resource.”
Mr. Gilbert has made no secret of his search for an acquisition to deepen the firm's footprint in the U.S. During a May 5 conference call following a financial update for the six months ended March 31, Mr. Gilbert said, “We have been looking in the U.S. for a long time, but haven't found anything.”
Pakenham Partners served as financial adviser to Aberdeen; Berkshire Capital was financial adviser for FLAG.