Aberdeen Asset Management agreed to buy emerging and frontier markets funds-of-funds firm Advance Emerging Capital.
The London-based money manager runs £409 million ($620 million) in open- and closed-end funds of funds.
Aberdeen will acquire 100% ownership of the firm. Dubai-based group Rassmal Investments currently owns an 81% stake, and the remainder of the equity is held by management of the firm. Terms of the deal were not disclosed.
AEC's four investment professionals will be based in Aberdeen's London office, and will be part of the firm's alternatives business. Following the acquisition, which is subject to regulatory approval and is expected to close in the fourth quarter of this year, Aberdeen will manage 33 closed-end funds with more than £8.5 billion of assets under management.
The AEC team will be independent of Aberdeen's direct equity and fixed-income teams.
In a statement on its website, AEC said it invests in a number of Aberdeen strategies, investors will not be double-charged on these investments in Aberdeen funds.
“The acquisition of Advance Emerging Capital brings to Aberdeen a dedicated and highly experienced fund management team, expands further our closed-end fund business and adds to the range of alternative investment capabilities we already offer,” said Martin Gilbert, CEO of Aberdeen Asset Management, in a news release Tuesday.
In a note Tuesday provided to Pensions & Investments by a spokesman for Aberdeen, research analysts at Numis Securities said the transaction looks good for all parties. “For AEC, the future as a small boutique fund manager was challenging, particularly given the current environment for emerging markets.”
The analysts also addressed the issue of Aberdeen buying an emerging and frontier markets boutique, at a time when its share price has been hit by its exposure to the emerging markets asset class. “However, this is a small acquisition and there appears to be a good strategic fit.”