Aberdeen Asset Management’s proposed acquisition of a major asset manager in the UK has led to the surprise departure of its global property chief.
Andrew Smith is departing the company following Aberdeen’s announcement on Monday that it was acquiring Scottish Widows Investment Partnership (SWIP) from Lloyds Banking Group in a £550 million (€659 million; $887 million) deal. The takeover massively enlarges total assets under management at Aberdeen by £136 billion to £340 billion, elevating it as a top 5 European asset manager by assets value in the process. In terms of property investment management the purchase also rockets Aberdeen up the rankings as its assets swell by £8 billion to £23 billion.
In a statement today regarding Smith’s departure, the company did not provide any detail other than to say: “We are grateful to Andrew for his efforts in running the division over recent years and wish him well for the future.”
His duties and responsibilities have been divided between Pertti Vanhanen as group head of property and Russell Chaplin, chief investment officer.
Vanhanen was appointed head of fund of fund management in Aberdeen’s property group in 2011, but he joined the company in 2002 initially as managing director of Aberdeen Property Investors Finland following the company’s major expansion into the market. He subsequently served as head of Aberdeen’s Nordic and Eastern European team, then as head of direct property, Europe. Chaplin joined Aberdeen much more recently – in September 2010 – from UBS Global Asset Management.
The majority of SWIP’s real estate portfolio is in the UK. Aberdeen’s Chaplin said a “particularly attractive part of the deal” was SWIP’s £2.4 billion pooled property fund which “fills a gap in our product range and a vehicle we are optimistic about growing”.
He added: “The combined capabilities and teams will mean we are well positioned to source and obtain attractive opportunities on behalf of our clients.” The company has not yet provided detail of the number of real estate professionals that will transfer to Aberdeen from SWIP.
Lloyds, which is 33 percent owned by the UK government, is selling off non-core assets to bolster its balance sheet and focus on lending, but it will own a 9.9 percent stake in the enlarged Aberdeen assuming the transaction completes.
As for Aberdeen’s property group, it operates a direct real estate including separate account mandates for the Nordics, the UK, Continental Europe as well as Asia and the US, plus a multi-manager unit that employs 25 investment professionals. The strategy range of the direct property group is core to value-added. It has been managing capital for third parties since the 1970s.