Aberdeen to acquire Advance Emerging Capital to expand alternatives capabilities

London-based AEC is a specialist investment manager with nearly two decades of experience managing portfolios of primarily closed end, but also open end, fund-of-fund vehicles.

As of 30 June this year, the company managed £409 million across a range of investment funds.

The two largest vehicles that the team manages are Advance Developing Markets Fund Limited and Advance Frontier Markets Fund Limited, both of which are closed end. Following the transaction Aberdeen will manage 33 closed end funds with aggregate assets under management of over £8.5 billion.

The AEC team includes four investment professionals with over 50 years of combined investment experience. They will be based in Aberdeen’s London office and will be part of the group’s Alternatives business which is led by Andrew McCaffery.

Aberdeen said its latest acquisition will provide the opportunity to expand its offering globally, across a wider range of additional strategies within the fund of closed end funds sector, when combined with the broader Aberdeen Alternatives capability.

A statement from Aberdeen said the team will be independent of Aberdeen’s direct equity and fixed income teams. In line with Aberdeen’s fee policy, the AEC funds will not be double-charged on any Aberdeen funds held in the portfolios.

Martin Gilbert, chief executive of Aberdeen asset management, said:“The acquisition of Advance Emerging Capital brings to Aberdeen a dedicated and highly experienced fund management team, expands further our closed end fund business and adds to the range of alternative investment capabilities we already offer. AEC investors will benefit from the management team being part of a larger, independent asset manager and the ability to draw on the Group’s established distribution and operational expertise in regard to closed end funds.”

Andrew Lister, co-chief investment officer, advance emerging capital, said:“Aberdeen is an investment house we have immense respect for, and with which we share a similar investment philosophy and appreciation of the benefits of the closed end fund structure. We are therefore delighted to be joining them, where we will continue to implement our current strategy and process with significant additional support provided by Aberdeen’s Closed End Funds team and the operational infrastructure that comes with being part of a FTSE 100 company. Sitting within Aberdeen’s rapidly growing Alternatives business will, we believe, enable us to share ideas and best practice to the benefit of our existing investors.”

The purchase of AEC comes hot on the heels of Aberdeen’s recently completed acquisitions of FLAG Capital Management, a diversified private markets manager, and SVG Capital’s stake in the joint venture Aberdeen SVG Private Equity Managers.

Aberdeen has also entered into an agreement to acquire Arden Asset Management LLC, a specialist hedge fund manager and adviser.

Aberdeen said all the transaction are part of its strategy to “strengthen its alternatives capabilities to meet growing demand from investors that are looking to diversify their portfolios”.