Abrdn weighs split of private equity assets to draw fresh bids –source

Rothschild & Co SCA

19/04/2023 14:18

By Pablo Mayo Cerqueiro and Iain Withers
       LONDON, April 19 (Reuters) - Abrdn  ABDN.L  is seeking
to individually sell a batch of private equity businesses which
collectively have about 12 billion pounds of investments, after
struggling to find a buyer for the entire portfolio, a source
close to the matter said.
    The British asset manager has been working with advisers at
Rothschild & Co  ROTH.PA  to sell the package of businesses
spanning Britain, the United States and continental Europe, a
second source said, amid a push by investors to boost flagging
returns by offloading non-core assets.
    Abrdn's CEO, Stephen Bird, has sought to cut costs as he
embarks on the final year of a three-year plan to try to reverse
the asset manager's fortunes, after years of outflows and a
temporary drop out of the FTSE 100 index last year.
    The planned divestment was reported in February to have
attracted a small number of suitors, including Santander Asset
Management, at a valuation of about 250 million pounds ($310
million).
    Abrdn is now exploring a piecemeal sale following feedback
from prospective bidders, the source said.
    The fund manager oversaw more than 12 billion pounds of
private equity investments at the end of last year, according to
its latest annual accounts. 
    The exact mark-up of the assets on sale - which do not
include its listed private equity trust - was unclear.
    Abrdn, Rothschild and Santander declined to comment.
    The fund manager is looking to sell its private equity
operations because it believes it lacks the scale to effectively
compete in this space, one of the sources said, adding there was
potential to work with any buyer to retain a stake or take part
in a joint venture.
    Other disposals under Bird's tenure have included the sale
of part of Abrdn's stakes in British insurer Phoenix Group
Holdings  PHNX.L  and Indian insurer and asset manager HDFC
 HDFL.NS , while his biggest takeover was buying mass-market
investing platform interactive investor. 
    Like rivals, Abrdn is seeking to improve returns after a
torrid 2022 for asset managers, with the industry's earnings
squeezed by a global markets rout, rapid inflation and the
economic impact of war in Ukraine.
    The company's overall assets under management fell 8% to 500
billion pounds in 2022, while it reported a further year of net
outflows of client funds.
($1 = 0.8022 pounds)

 (Reporting by Pablo Mayo Cerqueiro and Iain Withers in London;
additional reporting by Jesus Aguado in Madrid; editing by
Sinead Cruise and Elaine Hardcastle)
 ((Pablo.MayoCerqueiro@thomsonreuters.com;))