Aberdeen buys SWIP’s infrastructure unit

The transaction is part of the overall acquisition of Scottish Widows Investment Partnership by the £320bn asset manager.

Aberdeen Asset Management (Aberdeen) has completed the acquisition of Scottish Widows Investment Partnership’s infrastructure fund management business from Lloyds Banking Group.

The news marks the last step in the overall purchase of Scottish Widows Investment Partnership (SWIP) by the asset manager, which was first announced in November. It will see Lloyds acquire a 9.9 percent share in Aberdeen and receive a top-up payment of £38 million (€46 million; $64 million), valuing SWIP at £550 million.

SWIP’s infrastructure business, headed by Gershon Cohen, has around £1.3 billion in funds under management. The unit’s latest deals include its 30 percent participation in Scots Road Partnership, the consortium behind a £415 million motorway upgrade in Central Scotland. The project was first announced in August 2013.

SWIP’s new owner will strive to keep its management team and investment strategy intact while allowing it to benefit from Aberdeen’s international presence, a spokesperson told Infrastructure Investor.

“Over the past few years, infrastructure has emerged as a key asset class for insurers and pension funds as they seek long-dated, inflation-linked assets to match liabilities. We have been looking for ways to be active in this sector,” commented Martin Gilbert, chief executive of Aberdeen, in a statement.

Aberdeen sought to acquire SWIP to complement its existing offering, extend its relationship with Lloyds Banking Group, add scale to its business and diversify, said the spokesperson, who also believed Lloyds wanted to dispose of the unit to focus on its core banking and insurance capabilities.

Aberdeen is already an active investor in real estate, private equity and hedge funds. The company now bills itself as Europe’s largest independent asset management business, with £320 billion of total assets under management.