Aberdeen acquires £1.5bn in closed end funds – Daily Business

Aberdeen Investments is acquiring the management of closed end fund assets totalling £1.5bn from MFS, further cementing Aberdeen’s position as the fifth largest asset manager of CEFs globally.

Through a series of mergers and reorganisations, nine MFS funds, in addition to one existing Aberdeen closed end fund, will be consolidated resulting in two active closed end funds. Both combined funds will benefit from significant scale, creating a springboard for potential future growth.

Aberdeen currently manages c.£21.4bn in closed end funds. It said it is well placed to support consolidation in the sector, helping to deliver larger funds that benefit from economies of scale and offer greater liquidity for investors.

No staff or corporate entities will transfer as part of the transaction, and the acquisition is income accretive from year one. The deal remains subject to approval by the shareholders of the respective funds.

It will be Aberdeen’s 10^th US CEF acquisition since 2000.  Last year, it invested the equivalent of around six months of management fees in the shares of its UK listed investment companies.  In 2024, it executed one of the largest mergers ever in the sector with BBOX and UKCM.

Jason Windsor, Aberdeen Group CEO, said it was a “highly synergistic acquisition”.

Christian Pittard, head of closed end funds, and managing director, corporate finance at Aberdeen Investments, added: “This is an exciting opportunity to bring our institutional skills and leadership in fixed income and private credit to US retail investors through a liquid, closed end fund structure.

“The enlarged funds will come with real scale and will focus on areas of deep expertise for Aberdeen where we see clear potential for further growth. MFS pioneered US mutual funds back in 1924, and we are proud they have chosen Aberdeen for this agreement.”

Both funds will be managed by Aberdeen’s Global Head of Fixed Income, Jonathan Mondillo.  The multi-sector fund will mark Aberdeen’s first foray in the US into this part of the market, investing in a variety of bonds from different sectors, including private credit, to provide a high level of income and risk adjusted returns.