Aberdeen Asset Management PLC (Aberdeen) is pleased to announce it has agreed to acquire a 50.1% stake in SVG Advisers (SVGA) for a cash consideration of £17.5 million. This business will be combined with Aberdeen’s existing private equity capability to create a substantial private equity fund of funds business with almost £5 billion in assets under management.
The transaction is consistent with Aberdeen’s stated strategy of acquiring smaller businesses to enhance and accelerate the Group’s own organic growth. SVGA is a wholly owned subsidiary of SVG Capital plc (SVGC), an international private equity investor and fund management business listed on the London Stock Exchange.
SVGA is an established private equity specialist with approximately £4 billion of assets under management and advice (including the SVGC private equity portfolio). Upon completion SVGA will be integrated with Aberdeen’s own private equity fund of funds business which manages £0.7 billion in assets. The combined business, Aberdeen SVG Private Equity, will be led by Lynn Fordham, Chief Executive of SVGC. Anne Richards, Chief Investment Officer, and John Brett, Head of Distribution, will represent Aberdeen on the Aberdeen SVG Private Equity board.
Aberdeen has the option to acquire, and SVGC the option to sell, the remaining 49.9% stake at any time from the third anniversary of completion, at a price based on a valuation of the business at the time the option is exercised, subject to a minimum of £20 million and a maximum of £35 million.
The key benefits of the transaction for Aberdeen are that it:
• provides critical mass, considerable experience and a long-term track record to Aberdeen’s private equity offering;
• makes the private equity business a more meaningful component of the Aberdeen Solutions franchise;
• provides Aberdeen’s global client base with a broader choice of private equity products and access to planned new fund launches, and
• provides a pathway to Aberdeen for full ownership of a substantial private equity business.
The transaction is subject to regulatory consent and certain other customary matters and is expected to be completed in the first half of 2013.
Martin Gilbert, chief executive of Aberdeen Asset Management, comments: “SVGA’s considerable experience and track record, combined with Aberdeen’s own asset management expertise and global distribution network will position us well to meet demand from investors seeking exposure to private equity. Institutional investors are increasingly looking towards alternative asset classes, including private equity, to diversify their portfolios and offer additional sources of alpha.”
Lynn Fordham, chief executive of SVG Capital, added: “This is an exciting development for both SVGA and Aberdeen. Combined, SVGA’s long-established private equity expertise and Aberdeen’s global distribution network and fund management capability will create a solid platform from which the Aberdeen SVG franchise can grow. I look forward to working with the Aberdeen team in what I am confident will mark the start of an exciting union with significant potential.”