By ADRIAN LOWCOCK 05/01/2009
Credit Suisse
Following the unsettling events of 2008 we are starting to see consolidation in the Fund Management sector with Aberdeen agreeing to purchase Credit Suisse’s funds in exchange for a 24.9% stake in the business, valued at £250 million. The total funds under management with Credit Suisse is £40 billion. Before this announcement Aberdeen were recently tipped as a potential buyer of New Star.
The deal requires regulatory approval from a range of jurisdictions and will need to be approved by Aberdeen shareholders. It is expected to complete in the second quarter of 2009, however, we would not expect investors to see any significant changes for another 12 months.
Bestinvest has not rated any Credit Suisse funds since downgrading the Income fund in 2003 following Bill Mott stepping away from the day to day management of the fund. During this time Credit Suisse has gone through more than their fair share of manager changes. The addition of these funds to the Aberdeen stable will probably have little impact for existing investors in Aberdeen, but for the Credit Suisse funds in Global Emerging Markets, Asia, Global Equity (where Aberdeen have a strong presence) we see this as a positive development.
Societe Generale
Soc Gen also confirmed before Christmas that their asset Management arm is to be purchased by the alternative assets managers GLG Partners. GLG currently manages over $17 billion of net client assets, to which Soc Gen will add $8.2 billion
Bestinvest currently rate the SG Japan Core Alpha and we are confident that it is business as usual for the manager Stephen Harker.
As the economic climate continues to deteriorate we could see further consolidation in this sector with many of the weaker asset managers being absorbed by the stronger players. As such we would suggest investors look to houses with stable funds as any consolidation will inevitably lead to some fund closures.