Aberdeen Investments has reached agreement with MFS to acquire the management of closed end fund (CEF) assets totalling £1.5bn.
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.
These comprise four MFS municipal bond CEFs and one Aberdeen Municipal bond CEF, which will be consolidated to create a circa $1bn assets under management (AUM) municipal bond fund, and five MFS taxable fixed income funds, which will be merged to create a circa $1.4bn AUM multi-sector fixed income CEF.
No staff or corporate entities will transfer as part of the transaction, and the deal should be income accretive from year one. It remains subject to approval by the shareholders of the respective funds.
Jason Windsor, Aberdeen Group chief executive, said: “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 CEFs and managing director o corporate finance at Aberdeen Investments, added: “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.
This will be Aberdeen’s 10th US CEF acquisition since 2000. Last year, the firm invested the equivalent of around six months of management fees in the shares of UK listed investment companies.
Aberdeen currently manages around £21.4bn in closed end funds, making it the fifth largest manager of closed end funds globally.
