Aberdeen To Acquire FLAG Capital Management, LLC To Boost Global Alternatives Capability And Establish A Strong Alternatives Footprint In The U.S.

May 27, 2015, 08:30 ET from Aberdeen Asset Management

PHILADELPHIA, May 27, 2015 /PRNewswire/ -- Aberdeen Asset Management PLC (Aberdeen) is pleased to announce it has entered into an agreement to acquire FLAG Capital Management, LLC (FLAG), a manager of private equity and real asset solutions with offices in Stamford CT, Boston, MA, and Hong Kong.

This acquisition is in line with Aberdeen's strategy to strengthen and grow its global alternatives platform and solutions provision via multi-manager coverage of hedge funds, property and private market allocations, infrastructure investments and pan-alternative capabilities. FLAG's well-established private equity teams in the U.S. and Asia will help broaden Aberdeen's private markets solutions activity within the alternatives arena.

As of December 31, 2014 , FLAG managed assets of approximately $6.3 billion of invested and committed capital on behalf of its broad client base. FLAG is a diversified private markets solutions business focused on venture capital, small- to mid-cap private equity, and real assets in the U.S., as well as private equity in the Asia-Pacific region. The business will be fully integrated into Aberdeen's current private markets capability. This will position Aberdeen as a leading global private equity investor with over 50 investment professionals and roughly $15 billion of assets under management.

Aberdeen's alternatives platform, overseen by Andrew McCaffery, Global Head of Alternatives, will have total  assets under management of $21.3 billion following completion of the transaction. 

The transaction provides key benefits to Aberdeen:

  • The addition of FLAG's U.S.- and Asia-focused investment capability, combined with Aberdeen's strength in Europe, will offer clients a compelling global private markets solutions proposition;
  • FLAG's long-established presence across the institutional and high-net-worth client segments in the U.S. increases Aberdeen's exposure to the region and enhances the footprint among family offices, endowments and public and corporate pension plans;
  • We believe FLAG's expertise in successfully launching private equity and real asset-linked products will permit Aberdeen to accelerate organic growth in this business segment;
  • FLAG's funds bring highly stable revenues that are at low risk of outflows; once launched, each fund's revenue stream is defined, based on committed capital and a fixed fee schedule over the multiple-year life of the fund, which typically is set at 12 years;
  • The integration of FLAG's investment platform boosts Aberdeen's pan-alternatives capability, allowing Aberdeen to provide to its client base a full range of private markets solutions.

The transaction, which is currently expected to close in the third quarter of 2015, is subject to regulatory approval from the Hong Kong Securities and Futures Commission (SFC) 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 advisers to Aberdeen on this transaction; Berkshire Capital served as financial advisors for FLAG.

Commenting on the transaction, Martin Gilbert, Chief Executive of Aberdeen, said: "Institutional investors are increasingly looking towards alternative asset classes, including private market allocations, to diversify their portfolios and enhance returns. 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. FLAG meets this objective in two ways. Initially, it strengthens further our private market capability by bringing additional Asian expertise and new U.S. resource. This will also benefit our overall pan-alternatives platform. Secondly, FLAG deepens and expands our U.S. client base, which is a key growth market for Aberdeen."

Commenting on the transaction, Peter Lawrence, Chief Executive of FLAG, said: "We at FLAG are thrilled to be joining Aberdeen, not only because of its reputation and position as one of the leading global asset management firms, but also because of the clear cultural fit of our two organizations. We believe the combination serves the interests of all of our constituents, particularly our limited partners and the talented team of professionals that have built FLAG into the high-achieving, high integrity firm that attracted Aberdeen in the first place.  Simply put, we can think of no better or more appropriate future for all involved.  As integral members of Aberdeen's private markets solutions team, we're excited to deliver a truly global array of private capital solutions for our investors."

Notes to Editors

Aberdeen – simply asset management.

Aberdeen is an independent asset management company. Formed out of a management buy-out in Aberdeen, Scotland, in 1983, we are now a FTSE 100 company operating on-the-ground in over 25 countries across Europe, Asia and the Americas.

We are defined by our pure focus on asset management, including equities, fixed income, property and multi-asset portfolios. All our investment solutions are driven by our commitment to straightforward, transparent investment approaches that stress intensive, first-hand research and a long-term view.

As of March 31, 2015, we manage assets of $490.8 billion on behalf of institutional and private investors.

In the United States, Aberdeen Asset Management (AAM) is the marketing name for the following affiliated, registered investment advisers: Aberdeen Asset Management Inc., Aberdeen Asset Managers Ltd, Aberdeen Asset Management Ltd and Aberdeen Asset Management Asia Ltd, each of which is wholly owned by Aberdeen Asset Management PLC. "Aberdeen" is a U.S. registered service mark of Aberdeen Asset Management PLC.

In Canada, AAM is the marketing name for Aberdeen Asset Management Inc., Aberdeen Fund Distributors, LLC, Aberdeen Asset Management Asia Ltd and Aberdeen Asset Management Canada Limited. Aberdeen Asset Management Inc. is registered as a Portfolio Manager in the Canadian provinces of Ontario, Nova Scotia, and New Brunswick, and as an Investment Fund Manager in the Canadian provinces of Ontario, Quebec, and Newfoundland and Labrador. Aberdeen Asset Management Asia Limited and Aberdeen Asset Management Canada Limited are registered as Portfolio Managers in Ontario. Aberdeen Fund Distributors, LLC operates as an Exempt Market Dealer in all provinces and territories of Canada. Aberdeen Fund Distributors, LLC and Aberdeen Asset Management Canada Limited are wholly owned subsidiaries of Aberdeen Asset Management Inc.

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SOURCE Aberdeen Asset Management