Consolidation within the hedge-fund of funds business continues with another firm being picked up by a larger, diversified asset management firm, and it closed on the last day of 2015 - the biggest year ever for mergers and acquisitions. The year's total volume of "M&A" activity surpassed 2007's previous record of $4.296 trillion on December 2, and plenty more deals were piled on in the final 27 days of the year. One such deal was Aberdeen Asset Management's acquisition of Arden Asset Management, the New York- and London-based provider of hedge-fund solutions, which was completed on December 31.
Expansion of Aberdeen's Platform
"We are very pleased to have closed on the acquisition of Arden Asset Management LLC," said Andrew McCaffery, Global Head of Alternatives at Aberdeen Asset Management, in a statement announcing the closing of the deal. "Our excitement about the potential of the combined, integrated platform continues to grow, enhanced by the very encouraging feedback we have received from clients since signing the agreement."
Abderdeen's alternatives division, which is headed by Mr. McCaffery, had more than $21 billion in assets under management ("AUM") as of September 30, 2015. The firm's acquisition of Arden should grow its global alternatives platform, which includes multi-manager research, selection and portfolio management for hedge fund strategies, private equity and debt, property and other real asset investments, as well as direct investments in infrastructure products. Abderdeen will now be able to offer its clients access to a broader universe of alternative investments, ranging from private markets and real assets to liquid alts.
Research Driven Process
"We continue to focus upon the opportunity presented by investors' increasing demand for high-quality research, combined with effective portfolio construction and management, in an effort to generate sustainable returns for their hedge fund portfolios," said Mr. McCaffery. "The development of liquid-alternative portfolios and products, built off our broader hedge fund solutions platform, is an area that we are increasingly confident will grow in 2016 and beyond."
As a result of the merger, Aberdeen has become the investment advisor to the Arden Alternative Strategies Fund (MUTF:ARDNX) and the Arden Alternative Strategies Fund II (MUTF:ARDWX). Aberdeen plans to reorganize both funds into a newly created series of Aberdeen Funds sometime in the first quarter of 2016.
Jason Seagraves contributed to this article.