AAM is hot property after sealing GPI deal

Published on Tuesday 6 May 2008 10:25

SCOTTISH fund manager Aberdeen Asset Management (AAM) has announced it is to buy one of the UK's biggest property fund managers in a deal worth an initial £89 million.

The company is to acquire Goodman Property Investors (GPI), which boasts a property portfolio worth in excess of 7 billion.

The deal will make AAM the UK's second-biggest fund manager and put it among the world's top ten.

AAM's property subsidiary Aberdeen Property Investors (API) has previously focussed investment on continental Europe but the deal will give it significant UK property assets. Around 93 per cent of Goodman's funds are invested in UK property, including the Burger King building on Princes Street.

News of the deal comes as AAM today said pre-tax profits before exceptional items in the six months to the end of March were at 47.3 million, compared to 43.6m last year.

Martin Gilbert, chief executive of AAM, said: "This acquisition will make Aberdeen Britain's second largest property fund manager and a top ten global player, with some 24bn under management.

"In particular, GPI will give us real scale in the key UK market and transform API into a truly global operation. Together under single ownership the companies of GPI and API will have significant opportunities to offer our clients an enhanced product suite while leveraging management expertise and client relationships across the enlarged group."

Gregory Goodman, chief executive of Goodman Group, said: "As part of ongoing operations we conducted a strategic review for GPI in 2007. We concluded that the best way to optimise value for the underlying investors in the GPI platform was to combine with a strong specialist with a highly complimentary business model.

"Aberdeen was a highly strategic fit and was viewed as the best long term owner of GPI. We are pleased to announce this transaction as it represents a successful conclusion to our 2007 strategic review."

AAM's latest half-year results show that its assets under management have increased by 12.6 per cent to 107.3bn, while revenues increased from 162.5m in the first half of last year to 201.5m.

Commenting on the results, Mr Gilbert said: "We are extremely pleased with our progress in the past half year in difficult market conditions.

"These results are a tribute to the tremendous resilience of our group. The combination of our global scale, our broad spread of operations and asset classes, our strong balance sheet and most of all our skilled people is enabling us to build our asset base, cash flow and profitability.

"We are never complacent however and are looking to improve our efficiency and reduce group costs by at least 15m over the next year."