By Sophie Sassard and Aditi Shrivastava
LONDON Feb 14 British fund manager Aberdeen
Asset Management has unveiled two acquisitions, a U.S.
fund manager and a 50.1 percent stake in an international
private equity business, to buy its way into new markets.
Aberdeen is to buy New York-based asset management firm
Artio Global Investors for about $175 million, or $2.75
per share, and the stake in SVG Advisers (SVGA) for 17.5 million
pounds ($27 million).
The deals were part of a cautious strategy of expansion
through bolt-on acquisitions and did not mark the start of an
aggressive buying spree, chief executive Martin Gilbert said.
"Our preference is to do small infill acquisitions that
enhance earnings per share," Gilbert told reporters on Thursday.
"Both deals appear sensible. In particular, the Artio goes
some way to address a strategic imperative for Aberdeen; namely
to build its U.S. distribution capabilities," Peel Hunt analysts
said in a note to clients.
"A key question now must be whether these deals are one-off
and opportunistic or whether this marks a shift in strategy back
The price being paid for Artio was a 34 percent premium to
Wednesday's closing price. Aberdeen shares were up 2.0 percent
to 424.5 pence at 1110 GMT.
Gilbert said Artio, which has $14.3 billion in, mainly,
fixed income assets, will add scale and distribution channels to
Aberdeen's existing business in the United States, "a priority
While Artio manages $4.5 billion of international global
equities, Gilbert said he expected much of this to leave and
Aberdeen had targeted the firm for its fixed income business.
"I think we have a very good track record in global equities
but the way we like to look at things is to take a prudent view:
the bulk of Artio's international equities will go out the door.
Whatever we keep will be a bonus for us," he said.
The deal should be earnings enhancing from the outset,
Aberdeen said. Gilbert said while Artio fixed income management
teams will join Aberdeen, there would be job losses in support
Aberdeen's deal to buy into SVGA includes an option for it
to buy, or for current owner SVG Capital to sell, the
remaining 49.9 percent in three years for 20-35 million pounds.
SVGA has about 4 billion pounds ($6.2 billion) assets under
management which will be combined with Aberdeen's private equity
capability to create a private equity fund of funds business
with assets of almost 5 billion pounds.
Gilbert said Aberdeen would have been prepared to carry out
a full acquisition and he intended to exercise the option to buy
the remainder. "I suspect SVG thought it was probably better
from their point of view to sell us 50.1 percent."
Speaking to Reuters after SVG Capital reported a 16 percent
increase in net asset value per share, its chief executive Lynn
Fordham said the deal, as structured, was the best option for
"For our investors, it is a good transitional period, to get
the benefit of the upside for a good period of time and give us
some influence over the alliance given we give the private
equity expertise and Aberdeen bring the distribution," she said.
The SVGA and Artio deals are expected to close respectively
in the first half of 2013 and by the end of the second quarter
or early in the third quarter of 2013.
J.P Morgan is acting as financial adviser and corporate
broker to Aberdeen on the Artio acquisition and Willkie Farr &
Gallagher LLP is acting as Aberdeen's U.S. legal adviser.