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Aberdeen in search for buyer as emerging markets take toll

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Aberdeen Asset Management has begun to sound out potential buyers for the group as Europe's second-largest fund house struggles to put an end to a slump in its profitability, share price and assets under management.

People familiar with the process said Martin Gilbert, Aberdeen's 60-year-old founder and chief executive, had made informal approaches to a number of rivals in recent months.

Mr Gilbert declined to comment, but one person familiar with his thinking said he was "very happy being independent", without denying that approaches had been made.


Aberdeen has been hit by recent turmoil in emerging markets, where the group built its reputation and much of its investments are based. Its share price has fallen by 25 per cent over the past six months, and the fund house suffered net outflows of almost £10 billion in the three months to the end of June, worse than analysts had expected. Total assets stand at £307 billion.

"[Martin Gilbert] is in deep trouble," said one asset management M&A expert, who requested anonymity. He said the group was struggling to hold on to key staff as the fall in assets was having a negative effect on employee bonuses.

A hedge fund chief executive, and acquaintance of Mr Gilbert's, added: "I have heard the [sale] rumours. Martin is of the age where he needs to find a successor, and there is no one [appropriate] within the business today.

"Aberdeen has a huge Asian equity market problem, [and has experienced] a huge amount of outflows. They don't want to wait that out for three years as there is probably only one direction it will go, and that is down."

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An Aberdeen spokesperson said: "In his 32 years years running Aberdeen Asset Management, Martin Gilbert has never made a formal or informal approach to anyone to buy the business."

A number of UK, US and Asian fund groups may be interested, asset managers said. Private equity groups KKR, Blackstone and Warburg Pincus would also be keen on a deal, said analysts.

Credit Suisse and Deutsche Bank have signalled a renewed interest in asset management although short-term acquisitions are unlikely, according to bank insiders.

Aberdeen bought the UK and US institutional fund businesses of Deutsche in 2005 and acquired a large chunk of Credit Suisse's global fund management operation seven years ago, leaving the Swiss bank with a 25 per cent stake in Aberdeen, which it later sold.

Mr Gilbert, who was travelling last week in Malaysia and Japan, is known to be close to Credit Suisse and its new chief executive Tidjane Thiam. "It's blindingly obvious that Credit Suisse should buy Aberdeen," said one person close to the situation.

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Mr Thiam has told colleagues he will not make any significant acquisitions in the short term, focusing instead on the bank restructuring announced last week. Credit Suisse declined to comment.

A senior Aberdeen employee said: "I have no knowledge of [a potential sale]. We've been independent forever." But he added: "I did hear a rumour that we could be a target [for acquisition] as we have a big cash holding, and I heard a rumour about Credit Suisse."

Mr Gilbert has held the top job at Aberdeen since he co-founded the company in 1983.