Aberdeen announces FLAG acquisition

The purchase of the diversified private markets manager with offices in Stamford and Boston in the US and Hong Kong comes hot on the heels of the purchase of SVG Capital’s stake in the joint venture Aberdeen SVG Private Equity Managers.

The brace of deals sees Aberdeen join a small number of private equity managers with investment professionals on the ground in the world’s major markets with a combined team now numbering 50 staff in the US, Europe and Asia.

Since inception, FLAG has raised over $7 billion of discretionary commitments from its broad client base, with investments focused on venture capital, small- to mid-cap private equity, and real assets in the US, as well as private equity in Asia.

Aberdeen said the acquisitions were part of its strategy to grow its alternatives business via multi-manager hedge funds, property and private market allocations, direct infrastructure investments and pan-alternative capabilities.

A recent PWC report predicted total investment in alternative assets would nearly double to $15.3 trillion by 2020.

In addition to the acquisition of FLAG, Aberdeen announced last month that it had entered into an agreement to acquire Arden Asset Management, a specialist hedge fund manager and adviser with offices in New York and London. Arden’s clients span corporate and state pension plans, sovereign wealth funds, global bank platforms and retail investors. The acquisition is expected to close by the end of 2015.

Following the completion of the Arden transaction, Aberdeen’s alternatives division, under global head of alternatives Andrew McCaffery, will have $30 billion of assets under management.

Mr McCaffery said: “The acquisition of FLAG is very important for our alternatives business. Alternatives are becoming increasingly popular with investors who are seeking diversification. But to be a credible provider you have to be able to compare markets and sectors globally and then drill down and understand what’s happening on the ground. This deal will help us meet that aim. We are now one of a handful of private equity investors with genuine local expertise in the US, Europe and Asia.”