Aberdeen to acquire Flag Capital Management

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Aberdeen has announced it has reached an agreement to acquire Flag Capital Management (Flag), a private equity and real asset manager with offices in Stamford, Boston and Hong Kong.

The deal, subject to regulatory approvals in Hong Kong and in the US, is expected to be concluded in the third quarter of 2015.

This acquisition will boost Aberdeen’s global alternatives platform. Flag’s private equity teams in the US and Asia will help broaden Aberdeen’s private markets solutions activity within the alternatives sector.

As of 31 December 2014, Flag had approximately $6.3bn (€6.28bn) of assets under management .

The business will be fully integrated into Aberdeen’s current private markets capability. The firm will manage roughly $15bn (€13.8bn) of assets in private equity.

Aberdeen’s alternatives platform, overseen by Andrew McCaffery, global head of Alternatives, will have total assets under management of $21.3bn (€19.6bn) after the transaction.

Among the key benefits of the acquisition, the company highlights Flag’s presence across the institutional and high-net-worth client segments in the US.

This will increase Aberdeen’s exposure to the region and enhances the footprint among family offices, endowments and public and corporate pension plans.

Also Flag’s expertise in launching private equity and real asset-linked products will permit Aberdeen “to accelerate organic growth in this business segment.”

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 US resource. This will also benefit our overall pan-alternatives platform.

“Secondly, Flag deepens and expands our US client base, which is a key growth market for Aberdeen.”

Peter Lawrence, chief executive of Flag, commented: “ 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.”

Adrien Paredes-Vanheule
Adrien Paredes-Vanheule is deputy editor and French-Speaking Europe Correspondent for InvestmentEurope, covering France, Belgium, Geneva and Monaco. Prior to joining InvestmentEurope, he spent almost five years writing for various publications in Monaco, primarily as a criminal and financial court reporter. Before that, he worked for newspapers and radio stations in France, in particular in Lyon.

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