Aberdeen Investments will take a hit of up to £200 million to two its infrastructure funds following the collapse of UK broadband provider Airband.

Aberdeen said the funds affected are the Standard Core Infrastructure II SCSp Fund and Aberdeen Standard Core Infrastructure III SCSp Fund.

It is understood that Airband’s lenders, including HSBC and Lloyds, will also take a hit from the sale of the broadband provider.

Airband entered administration and subsequently sold its assets and customer base to UK-based broadband company Voneus.

On Friday, Macquarie-backed Voneus said it completed the acquisition of Airband’s assets and customers, but did not disclose any financial terms.

An Aberdeen spokesperson said: “Strong demand for fibre connectivity, underserved rural markets with less competition and government-backed subsidy support schemes had originally drawn a range of investors to the sector.

“More recently, Airband has faced significant headwinds consistent with those affecting the wider UK fibre market, including higher build costs, slower customer growth, increased competition, and a challenging financing environment.

“These are challenges that have since resulted in material impairments and restructurings elsewhere in the sector.

“Following a disciplined review of future funding requirements and risk-adjusted return prospects, we made the difficult decision to cease further funding.

“While the situation remains challenging, this investment was one part of a diversified portfolio which has otherwise performed strongly and is currently expected to deliver positive returns to fund investors overall, notwithstanding the ultimate outcome of Airband.”