Aberdeen Asset Management is to acquire a 50.1 per cent stake in SVG Advisers (SVGA) for a cash consideration of GBP17.5m.
This business will be combined with Aberdeen’s existing private equity capability to create a substantial private equity fund of funds business with almost GBP5bn 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 (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 GBP4bn 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 GBP0.7bn 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 per cent 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 GBP20m and a maximum of GBP35m.
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 (pictured), chief executive of Aberdeen Asset Management, says: “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.”
Fordham says: “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.”
