October 18, 2005
Aberdeen Asset Management shifts focus from selling traditional investment instruments to Hedge Funds
Aberdeen Asset Management Plc has been constantly endeavoring to move away from small time individual investors. In the same direction, it now plans to sell hedge funds to big institutions and high net worth individuals. This is not an emergency change of strategy but instead can be regarded as a carefully designed maneuver. Martin Gilbert, Chief Executive Officer of Aberdeen Asset Management Plc was quick to add that the firm was not jumping into the arena just yet.
It plans to make the move a little later when they are better prepared and equipped. They plan to take on more clients and also double their assets by purchasing Deutsche Asset Management's U.K. business. The company currently has 28 billion pounds and hopes to get another 46 billion pounds on completing the purchase of Deutsche Bank AG's U.K. fund business. Aberdeen reportedly offered 265 million pounds for the unit.
Along with the business, the firm will also take over all of the 100 bond fund managers from Deutsche and a third of the 60 stock fund managers. The firm plans to run the proposed funds with its existing managers and analysts. Though nothing formal has been declared, the fund may be started by selecting 20 favorite stocks of its managers.
More and more traditional investment companies have been seen to be turning to hedge funds for the big money. The returns by way of higher management fees and performance fees, has lured firms like Legg Mason Inc. to buy hedge fund company Permal Group for as much as $1.39 billion in June. Even Britannic Asset Management, the Scottish money manager has recently hired two managers in order to start hedge funds.
The Scottish firm was established in 1983. By setting up hedge funds for institutions and high networth individual, the company, kind of completes the shift of focus from small investors to big game players. Last December the company reimbursed 78.3 million pounds to small investors after the collapse of some funds known as split-capital trusts. Bloomberg.com reports:
"Legg Mason Inc. agreed to buy hedge fund company Permal Group for as much as $1.39 billion in June, while Scottish money manager Britannic Asset Management hired two managers last week to start hedge funds."
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