Aberdeen Asset Management bolstered by £250m Credit Suisse deal

Published on Wednesday 31 December 2008 10:35

ABERDEEN Asset Management today unveiled a deal to buy parts of Credit Suisse's fund management business in a move worth £250 million.

The takeover will create the UK's largest listed fund management group and see investment banking giant Credit Suisse take a 25% stake in Aberdeen.

Scottish-headquartered Aberdeen saw its shares race 10% ahead on news of the deal, which is said to have been rushed through ahead of the year end.

Aberdeen already has around 100 billion in assets under management and will take on another 40 billion from Credit Suisse's traditional fund management operation, which has a presence in Europe and the Asia Pacific.

Martin Gilbert, chief executive of Aberdeen, said: "This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies."

The takeover is expected to complete by the end of June, with the acquisition of the Asia Pacific operation, excluding Japan, set to be sealed first, around the end of April.

Credit Suisse put its long-only, traditional fund management business up for sale after a strategic review earlier this year.

The group manages assets largely spanning fixed income, European money market funds and equities.

It is believed that UK fund management group Schroders was also in the running for the division.

Aberdeen has grown by acquisition in recent years, having secured the takeover of Deutsche Bank fund management businesses in 2005.

It spent more than 18 million integrating the Deutsche Bank acquisitions, but is said to have achieved success in aligning the two businesses.

Aberdeen confirmed today it expects to "operate the acquired business from a much reduced cost base", with reports it could shed around 30% of staff and streamline the back office.

The business has primary operations in London, Luxembourg and Sydney.

Aberdeen has so far emerged relatively unscathed from the stock market turmoil that has hit many other fund managers.

It reported an 800 million increase in pre-tax profits for the year to September 30.

However, Credit Suisse has not fared so well amid the credit crunch, announcing substantial writedowns and recently axing 10% of its staff in the UK as part of measures to offset the tough trading conditions.