Aberdeen AM to up RE allocation following SWIP takeover

Global fund manager Aberdeen Asset Management is on a drive to boost its allocation to real estate following the takeover of Scottish Widows Investment Partnership (SWIP) for £550 mln (€687 mln), which was completed at end-March.

Aberdeen acquired SWIP from state-backed Lloyds Investment Group in November 2013, adding £132 bn of assets and turning Aberdeen into the largest listed investment firm in Europe.

Aberdeen is now on a mission to boost its real estate portfolio, which currently accounts for 7% of total investment, in line with the industry average of between 5% and 7%.

‘One of our priorities is to increase that,’ said Pertti Vanhanen, global head of property at Aberdeen, based in London. ‘Our asset split typically reflects the split that our clients have. For example, our clients allocate between 5% and 15% of their portfolio to property. In the long-term, I think our allocation could grow to up to 12%,’ he said.

According to Vanhanen, the merger with SWIP has not had a big impact on his firm’s investment strategy. ‘The SWIP acquisition further strengthened our fixed income, solutions and property capabilities, adding assets and resources which can only support our organic growth ambitions in these areas,’ he said.

Since the takeover, the Aberdeen property division has been organised into three teams: fund management, asset management and transactions and business management. The expanded property business is being led by Vanhanen. Fund management is headed by Russell Chaplin, CIO of property. The UK asset management team is led by Giles Easter. The UK transaction team is headed by Rob Cass, who joined Aberdeen from Capita.

Aberdeen had around £24 bn of AUM as of end-June 2014, primarily in the UK and Europe. SWIP previously managed around £8 bn of property, of which £7.5 bn was invested in the UK. In total, Aberdeen manages £322 bn globally in equity, fixed income, multi-asset and alternative portfolios as well as property.