Aberdeen Asset Management looks to be on an expansion drive. It has agreed to acquire an Indonesian fund house and AsianInvestor understands it has decided to set up a Dubai office.
In agreeing to buy 80% of the share capital of Jakarta-based NISP Asset Management, the UK firm hopes to obtain its first local presence in Southeast Asia’s biggest economy. The deal would not only give Aberdeen a licence to operate, but also an investment team on the ground.
Korean fund house Mirae Asset had originally sought to acquire 70% of NISP AM, but ultimately shelved its plans last year.
However, other managers have proved more successful on this front. UK-based Ashmore bought an 85% share in Indonesian fund house Buana Megah Abadi and hired investment and sales staff, as reported exclusively by AsianInvestor last April. And Eastspring Investments gained a local licence in early 2012 and soon afterwards put a 20-strong team on the ground.
NISP AM was spun out of NISP Sekuritas in 2011, having operated as a fund manager since 2001. The fund house manages Rp3.5 trillion ($300 million) in mutual funds, protected funds and discretionary accounts.
Aberdeen entered into a conditional sale and purchase agreement with NISP Sekuritas on Tuesday for the all-cash transaction. Completion of the deal is subject to the satisfaction of conditions including receipt of regulatory approval from the Indonesian Financial Services Authority (Otoritas Jasa Keuangan) and the Monetary Authority of Singapore, and the approval of NISP AM’s shareholders.
Aberdeen has been investing in Indonesia since the 1980s and has $2.8 billion in Indonesian equities. It was the first foreign asset manager to launch a dedicated Indonesian equity fund in Singapore, in 1997, which has now grown to S$180 million, as at the end of January.
Meanwhile, Aberdeen has also decided to set up a sales and client-servicing office in Dubai, say industry players, although such a move is not on the immediate horizon.
Sources based in the Emirate say the firm has been making noises about putting a presence in the Middle East for a year or two, and that it would make sense for it to do so, as an emerging markets specialist. They add that the fund house seems to have stepped up activity on the wholesale distribution front in the region in the past 18 months.
A source close to the manager confirms that Aberdeen is looking at such a move, and already has strong institutional business in the Middle East. Two years ago the firm was exploring whether it was worth putting a presence there, he notes. “Now they are exploring how to do it.”
“[Dubai] would be a natural place [for the firm] to establish an office,” adds the source, “both to look after institutional clients locally and also to service the burgeoning wealth management channel that’s building up there, including private banks, consumer banks and insurers/IFAs.
A move is not thought to be imminent. The end of this year would not be out of the question, although sources suggest 2015 would be more likely.
Aberdeen declined to comment on its plans for the Middle East.
Other fund houses have also been expanding into Dubai. It emerged in early February that Wells Fargo Asset Management is reportedly in the process of putting staff there, and that Lazard Asset Management had hired Farah Foustok and her team from ING Investment Management.