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

Abrdn 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 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 (BME:SAN) 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 and Indian insurer and asset manager HDFC, 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)

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