Aberdeen Group Expands US Footprint with £1.5bn Closed-End Fund Acquisition

Aberdeen Group plc (LON: ABDN) has announced an agreement with MFS to acquire the management of closed-end fund (CEF) assets totaling £1.5 billion.

This strategic move further solidifies Aberdeen's position as the fifth-largest asset manager of CEFs globally, enhancing its presence in the lucrative US market.

The acquisition involves the consolidation of nine MFS funds and one existing Aberdeen CEF into two larger, actively managed closed-end funds.

This restructuring is designed to achieve economies of scale and improve liquidity for investors. Specifically, four MFS municipal bond CEFs and one Aberdeen municipal bond CEF will merge to create a c.$1 billion AUM municipal bond fund. Additionally, five MFS taxable fixed income funds will combine to form a c.$1.4 billion AUM multi-sector fixed income CEF, incorporating private credit.

The consolidation of these funds is expected to provide a springboard for future growth, leveraging Aberdeen's expertise in fixed income and private credit. No staff or corporate entities will transfer as part of the transaction, streamlining the integration process.

The acquisition is projected to be income accretive from the first year, promising immediate financial benefits for Aberdeen. The deal is pending approval by the shareholders of the respective funds.

Jason Windsor, Aberdeen Group CEO, stated, “We are delighted to add further scale to our US closed end fund platform, with this highly synergistic acquisition. As we implement our strategy to become the UK's leading Wealth and Investments group we will continue to invest in areas of strength where we see significant room for growth.”

Christian Pittard, Head of Closed End Funds, Aberdeen Investments, highlighted the opportunity to extend Aberdeen's institutional skills to US retail investors via liquid, closed-end fund structures. He noted that the enlarged funds will focus on areas of deep expertise for Aberdeen, where clear potential for further growth exists.

Both funds will be managed by Aberdeen's Global Head of Fixed Income, Jonathan Mondillo. The multi-sector fund will mark Aberdeen's initial venture into the US multi-sector fixed income market, investing across various bond sectors, including private credit, to deliver high income and risk-adjusted returns.

Aberdeen has a substantial track record in the CEF sector, evidenced by this being its 10th US CEF acquisition since 2000. The company has also demonstrated its commitment to shareholder value by investing in its own UK-listed investment company shares. Furthermore, Aberdeen successfully executed a major merger in 2024 involving BBOX and UKCM, showcasing its ability to navigate complex transactions.

Aberdeen currently manages approximately £21.4 billion in closed-end funds, making it the fifth-largest manager of CEFs globally, even before factoring in this latest acquisition.