Aberdeen closes private equity fund above target at $295m

It is the first fund closing announced since the completion of Aberdeen’s acquisition of FLAG Capital Management last month, and the second consecutive private equity fund by the same team that closed above its target.

The fund will invest in a strategically concentrated portfolio of lower-middle market, U.S.-based private equity funds that are often difficult for investors to identify, diligence and access.

A statement from Aberdeen said the fund will “focuses on managers led by proven, operationally-oriented investment professionals who have demonstrated an ability to originate differentiated deal flow, build value in companies post-close and generate premium investment returns. Additionally, FPE VI will target 20 percent of the portfolio in direct equity co-investments to enhance returns and mitigate the Fund’s J-curve”.

The Fund attracted capital from returning and new limited partners, the majority of which are institutional investor commitments across public and corporate pensions, foundations and endowments based in the United States and abroad.

Andrew McCaffery, Global Head of Alternatives at Aberdeen said: “The successful closing of FLAG Private Equity VI is a reflection of continued investor interest to allocate to private equity. It is also a great milestone for Aberdeen’s expanded presence in private market solutions, and more broadly in alternatives, and we appreciate the support of our limited partners.”

He added: “Our experienced investment team is already putting this capital to work and building a strong portfolio of private equity managers and direct investments.”

The Fund’s senior investment team leverages more than 150 years of collective investment experience across private capital asset classes, including significant direct general partner experience that provides an insider’s perspective in the evaluation of fund managers and co-investments.

“The lower middle market remains the least efficient segment of the private equity spectrum, with relatively less private capital available to fund a relatively large number of active investment opportunities,” said Scott Reed, Head of U.S. Private Equity at Aberdeen. “Our strategy is to identify, and build a portfolio of, the best small buyout managers that can capitalize on this inefficiency, with the goal of generating above market returns for our investors.”

Aberdeen joins a small number of private markets managers with investment professionals on the ground in the world’s major markets. The combined team now has around 50 professionals in across the U.S., Europe and Asia.