Aberdeen Group plc said its Aberdeen Investments business has reached agreement with MFS to acquire the management of closed end fund (CEF) assets totalling £1.5 billion, further cementing Aberdeen’s position as the fifth largest asset manager of CEFs globally.
Through a series of mergers and reorganisations, nine MFS funds, in addition to one existing Aberdeen closed end fund, will be consolidated, resulting in two active closed end funds.
“Both combined funds will benefit from significant scale, creating a springboard for potential future growth,” said Aberdeen.
Four MFS municipal bond CEFs and one Aberdeen Municipal bond CEF will be consolidated to create a $1 billion assets municipal bond fund.
Five MFS taxable fixed income funds will be merged to create a $1.4 billion assets multi-sector fixed income CEF (including private credit).
“As one of the largest managers of CEFs in the world, Aberdeen is well placed to support consolidation in the sector, helping to deliver larger funds that benefit from economies of scale and offer greater liquidity for investors,” said Aberdeen.
“No staff or corporate entities will transfer as part of the transaction, and the acquisition is income accretive from year one. The deal remains subject to approval by the shareholders of the respective funds.”
Aberdeen Group CEO Jason Windsor said: “We are delighted to add further scale to our US closed end fund platform, with this highly synergistic acquisition.
“As we implement our strategy to become the UK’s leading Wealth and Investments group we will continue to invest in areas of strength where we see significant room for growth.”
Christian Pittard, Head of Closed End Funds, and Managing Director, Corporate Finance, Aberdeen Investments, said: “This is an exciting opportunity to bring our institutional skills and leadership in fixed income and private credit to US retail investors through a liquid, closed end fund structure.
“The enlarged funds will come with real scale and will focus on areas of deep expertise for Aberdeen where we see clear potential for further growth. MFS pioneered US mutual funds back in 1924, and we are proud they have chosen Aberdeen for this agreement.”
Both funds will be managed by Aberdeen’s Global Head of Fixed Income Jonathan Mondillo. The multi-sector fund will mark Aberdeen’s first foray in the US into this part of the market, investing in a variety of bonds from different sectors, including private credit, to provide a high level of income and risk adjusted returns.
Aberdeen Group manages and administers £542 billion of client and customer assets across its three core businesses; interactive investor, Adviser and Investments.
Aberdeen Investments manages.£382 billion on behalf of clients, including insurance companies, sovereign wealth funds, independent wealth managers, pension funds, platforms, banks and family offices.
Aberdeen currently manages £21.4 billion in closed end funds, making it the fifth largest manager of closed end funds globally.