Scotland-based Aberdeen Asset Management is looking to expand its alternative offerings for retail investors in the U.S. On August 4, it announced the acquisition of U.S.-based fund-of-hedge funds manager Arden Asset Management. The move is will provide Aberdeen with immediate entry into both the institutional alternative investment market and the retail alternatives market in the U.S., once the transaction is completed.
“The acquisition of Arden emphasizes further Aberdeen’s commitment to diversifying its overall business and to growing its alternatives platform,” said Aberdeen CEO Martin Gilbert, in a recent statement. “Arden’s liquid alternatives platform in the US is particularly attractive as it provides investors with exposure to a portfolio of hedge fund-like strategies but importantly offers daily liquidity.”
Arden creates and manages hedge-fund portfolios for corporate and state pension plans, sovereign wealth funds, and other institutional investors. It also has an alternative product with daily liquidity for retail investors. These businesses complement Aberdeen’s hedge fund solutions and will be fully integrated, boosting Aberdeen’s hedge fund assets under management to $11 billion.
“The deal creates a combined hedge fund platform with international reach overseen by an experienced team of investment and operational professionals,” said Arden CEO Averell Mortimer. “Becoming part of Aberdeen will enable us to share ideas and best practice that will assist in continuing to build on our proven track record of developing customized hedge fund and liquid alternative solutions for clients worldwide.”
The transaction still requires the approval of regulators, including the Irish Central Bank. Aberdeen’s aim is to have the deal completed before the end of 2015.
Aberdeen’s acquisition of Arden comes on the heels of announcing in May its acquisition of FLAG Capital Management, a private equity and real assets specialist. Once both deals are completed, Aberdeen’s total alternative investment assets under management will jump to $30 billion.
Large asset managers acquiring large funds-of-funds has been an enduring industry trend. In 2005, Legg Mason completed its acquisition of Permal, then one of the world’s largest funds-of-hedge funds managers. More recently, Franklin Templeton acquired K2 Advisors in September 2012.