Aberdeen Investments has reached agreement with MFS to acquire the management of closed end fund (CEF) assets totalling £1.5bn, further cementing Aberdeen’s position as the “fifth largest” asset manager of CEFs internationally. Via 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 aim to benefit from scale, “creating a springboard” for potential future growth:
- four MFS municipal bond CEFs and one Aberdeen Municipal bond CEF will be consolidated to create a c.$1bn AUM municipal bond fund
- five MFS taxable fixed income funds will be merged to create a c.$1.4bn AUM multi-sector fixed income CEF (including private credit)
As one of the largest managers of CEFs in the world, Aberdeen is 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.”
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.”
This will be Aberdeen’s 10th US CEF acquisition since 2000.
This past year, they reportedly invested the equivalent of “around six months of management fees in the shares of our UK listed investment companies. In 2024, we also successfully executed one of the largest mergers ever in the sector with BBOX and UKCM.”
Aberdeen claims that it was the first asset manager to unveil “a suggested industry blueprint for solving the cost disclosure issues that have been plaguing investment companies, publishing a new ‘Statement of Operating Expenses’ (SOE) template.”
Currently, Aberdeen reports that it “manages c.£21.4bn in closed end funds, making it the fifth largest manager of closed end funds globally.”
