EquitiLink sold to Aberdeen for $80 million

Aberdeen enters the Australian institutional market and boosts its presence in Asian fixed income investments.

UK-based Aberdeen Asset Management has purchased EquitiLink, an Australian fund manager, for $80 million, in a bid to extend its reach in the Australasian region. The acquisition has catapulted Aberdeen’s negligible Asian fixed income portfolio of just under $10 million to one of the most prominent in Asia, commanding now more than $1.2 billion in the Asian bond markets.

For EquitiLink, the sellout will increase the company’s distribution network in Europe and the US and enhance its ability in research and analysis in a global environment. Under the deal, the Australian manager’s founding chairmen, Brian Sherman and Lawrence Freedman, will step down and the company will be renamed Aberdeen. Ouma Saninikone-Fletcher, EquitiLink’s chief executive officer, will stay.

Hugh Young, Aberdeen’s managing director in Asia, says the company’s strategy in Asia is to develop the institutional market in Australia and then increase its presence in the Asian fixed income market.

“Our first step is to build on the company’s domestic business in Australian equities and fixed income. EquitiLink has very strong links with consultants like William Mercer, Towers Perrin and Watson Wyatt, so we are hoping to develop our institutional business through consultants first,” he says.

“Another step is to offer Asian fixed income to the Asian market. EquitiLink has a strong track record in Asian fixed income. We also believe there will be strong growth in that market because it is vital for the growth of Asia. The region needs to have a strong government bond market in local currencies against which investors can benchmark the corporate bond market,” he adds, noting the growth of pensions money in Asia will be the main driver or the market.

EquitiLink has around $3 billion of assets under management, 70% of which is in fixed income. Of the fixed income portion, 20% is invested in Asian bonds. Aberdeen’s assets under management globally has increased to $42.4 billion following the purchase. Aberdeen currently has offices across the UK and investment operations in the US and Singapore.
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