Aberdeen to acquire fund of funds manager FLAG

Scotland-based Aberdeen will acquire FLAG to boost its alternatives capacity both globally and in the US

Aberdeen Asset Management plc has agreed to acquire FLAG Capital Management LLC to expand its alternatives platform, according to a statement.

The Aberdeen, Scotland-based asset manager will purchase FLAG for an undisclosed amount through a deal that includes stock in a move to grow its global alternatives platform, both globally and in the US. Aberdeen's alternative business is led by Andrew McCaffery, who serves as global head of alternatives. Aberdeen will have $21.3 billion (£13.88 billion; €19.60 billion) in assets under management once the transaction is completed.

“This transaction is in line with Aberdeen's strategy of undertaking clear value-added acquisitions that will assist with accelerating business growth in this area,” Aberdeen chief executive officer Martin Gilbert said, citing FLAG's private market business in the US and Asia.

Founded in 1983, Aberdeen has committed capital to 108 investments, managed eight funds and purchased a 50.1 percent stake in SVG Advisers for £17.5 million in 2013, according to PEI's Research & Analytics division. It had $490.8 billion in assets under management as of 31 March.

FLAG, a Stamford, Conn.-based fund of funds manager, managed assets of about $6.3 billion as of 31 December 2014, according to the statement. In 2012, it acquired Hong Kong-based Squadron Capital Management Ltd. As of March 2015, it had raised $88 million for its Venture Partners IX fund, according to the PEI Research & Analytics division.

This transaction is expected to close in the third quarter this year and is subject to regulatory approval from the Hong Kong Securities and Futures Commission and submission of a Hart-Scott-Rodino filing with the U.S. Department of Justice and the Federal Trade Commission.

Pakenham Partners served as financial advisor to Aberdeen and Willkie Farr & Gallagher LLP partner David Boston led its legal advisory team, Berkshire Capital advised FLAG.