Aberdeen buys US hedge fund provider

Aberdeen Asset Management has continued its acquisition spree with the purchase of Arden Asset Management, a hedge fund provider.

The asset manager plans to use Arden’s expertise in the hedge fund space to boost its capabilities in the alternatives market, with assets in the hedge fund division now up to $11bn (£7bn) after the acquisition. The alternatives platform at Aberdeen, run by Andrew McCaffery, will now manage more than $30bn.

“The acquisition of Arden emphasises further Aberdeen’s commitment to diversifying its overall business and to growing its alternatives platform,” says Martin Gilbert, chief executive of Aberdeen Asset Management.

In particular Gilbert highlighted the daily-liquidity, multi-manager hedge fund strategies that Arden has in the US are appealing.

“Arden’s liquid alternatives platform in the US is particularly attractive as it provides investors with exposure to a portfolio of hedge fund-like strategies but importantly offers daily liquidity,” says Gilbert.

The deal is part of Aberdeen’s continued push to expand into the US, a market it sees as crucial for the future growth of the business. 

In May Aberdeen bought Flag Capital Management, a US-based $6.3bn private equity and real assets manager, in a bid to improve its hedge fund, property, private markets, infrastructure and pan-alternative offerings

In 2013 Aberdeen also bought US firm Artio Global Investors as part of its push stateside, while in June Aberdeen issued £100m in shares to Japanese bank Mitsubishi UFJ Trust and Banking Corporation to fund new launches and acquisitions.

However, Arden recently lost a pension mandate in the US amid concerns of unstability at the firm. The New Jersey Division of Investment pulled a £335m contract with the manager saying: “Arden has experienced a high level of turnover among its investment professionals.”

In particular it was highlighted that “the individuals primarily responsible for constructing and managing the division’s portfolio have recently left the firm”.

Aberdeen has seen outflows recently as investors have cooled on emerging markets. It was hit by £19.5bn in gross outflows in the second quarter of 2015 as investors continued to back away from emerging markets.

Meanwhile, it’s well respected Asia Pacific Equity and Asia Pacific & Japan Equity funds recently hit the Spot the Dog list of underperfoming funds, from Tilney Bestinvest.