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  • Seller
  • Buyer
  • Type
  • Date Announced
  • Seller AUM
  • FLAG Capital Management, LLC
  • Aberdeen Asset Management PLC
  • Private Equity Fund of Funds
  • May 27, 2015
  • $6.3 Billion

Seller Details

FLAG Capital Management, LLC 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.  As of December 31, 2014, FLAG managed approximately $6.3 billion of invested and committed capital on behalf of its broad client base. FLAG has offices in Stamford CT, Boston, MA, and Hong Kong.

Buyer Details

Aberdeen is an independent asset management company. Formed out of a management buy-out in Aberdeen, Scotland, in 1983, Aberdeen is now a FTSE 100 company operating on-the-ground in over 25 countries across Europe, Asia and the Americas.  Aberdeen is defined by its pure focus on asset management, including equities, fixed income, property and multi-asset portfolios. Aberdeen's investment solutions are driven by its commitment to straightforward, transparent investment approaches that stress intensive, first-hand research and a long-term view.  As of March 31, 2015, Aberdeen manages 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.

Transaction Summary

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.

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;
•  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. 
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