Large secondary trades see Aberdeen scoop high-quality Regent fund units

Aberdeen buys Regent portfolio for new fund, as riskier Carnaby portfolio also changes hands

Specialist secondaries fund buyers have won two €100m-plus portfolios of European fund investments. Aberdeen Asset Management has completed the acquisition of most of Project Regent, a €110m portfolio of units in eight funds, for its new Aberdeen European Secondaries Property Fund (AES).

Another secondary market specialist has bought interests in nine funds in Italy and south eastern Europe that were packaged last year as Project Carnaby. Jones Lang LaSalle Corporate Finance marketed both portfolios. Ashley Marks, a director at JLLCF, was unable  to comment on the buyer for Project Regent, but said the portfolio had attracted “nearly a dozen investors, from global investors, secondary specialists, pension funds, private equity buyers and multi managers.

“JLLCF was delighted to be mandated on the two largest portfolios of European funds last year.” The Regent units were in eight good-quality, performing funds, thought to include: Neinver’s European Outlet Mall Fund; Stam Real Estate III (Paris offices); Cordea Savills’ German Retail Fund; Corner-stone Nordic Retail Fund; Genesta’s Nordic fund; and Tishman European Ventures.

One interest was taken up  by an existing investor via a pre-emption right and wasn’t included in the final sale. Regent’s vendor was a European pension fund multi-manager client of CBRE Global Investors. Aberdeen AM has €150m from seed investor Forsta AP-Fonden for AES, while Aberdeen and the management team have invested €1.5m.

Regent is the fund’s first acquisition and the portfolio is believed to have been acquired at a small discount to net asset value. Jon Lekander, global head of multi manager for Aberdeen, said: “We have a short capital-raising period for AES, this year, and another €150m that can be taken into the fund;  our deal pipeline is stronger.”

He added that the company has investments in more than 100 funds. It has already invested in five of the seven it has acquired in the Regent portfolio and has an investment in a predecessor fund of one  of the other two, giving it an advantage over other bidders, none of whom are thought to have wanted to acquire the whole portfolio. “This portfolio acquisition proves that by providing liquidity to a market where sellers outnumber buyers, you can find investment opportunities with attractive, risk-adjusted returns,” Lekander said.

Carnaby sale commands big discount

Project Carnaby, valued at around €100m, comprises higher-risk funds than those in Regent and is thought to have been sold to a secondaries buyer for at least a 50% discount. There were fewer bids and the spread of offers was much wider, reflecting the poorer quality of some of the assets.

Among the nine funds are three with Italian exposure, including Cordea Savills Italian Opportunity Fund. There are also vehicles invested in Hungary, Ukraine, the Czech Republic, Croatia, Bratislavan residential and Greek car parks. “The opportunity cost is attractive for the buyer and it was an opportunity for the vendor to exit cleanly,” said one source. The vendor is a UK-based fund manager.