Aberdeen’s Vanhanen and Chaplin set to take the helm after SWIP takeover

SWIP staff will report to Aberdeen heads after £550m takeover deal creates £23bn fund manager

Aberdeen’s Pertti Vanhanen and Russell Chaplin will head the £23bn property fund management business created after Aberdeen Asset Management’s £550m takeover of SWIP.

Andrew Smith, with Aberdeen for 12 years and global head of property since 2010, has left.

Vanhanen: Aberdeen’s group head of property will run the real estate division’s business side
Vanhanen: Aberdeen’s
group head of property
will run the real estate division’s business side

Vanhanen, previously head of fund management, has been appointed group head of property while Russell Chaplin will continue as the property chief investment officer.

A statement from Aberdeen said Vanhanen will be responsible for the business side of the
property division while Chaplin “will continue to focus on the investment side”.

Vanhanen will join the Aberdeen AM group management board with Chaplin as his alternate.

Aberdeen has not made any formal statement about SWIP’s property team but it is under- stood that SWIP’s senior property staff will report to Vanhanen and Chaplin after the sale is completed in Q1 2014.

Lynda Shillaw took over as SWIP’s head of property last year after moving from a senior real estate financing role at Lloyds.

Smith: head of property at Aberdeen has left the company after 12 years ahead of the SWIP deal
Smith: head of property
at Aberdeen has left the
company after 12 years
ahead of the SWIP deal

FTSE-100 listed Aberdeen, which has £200bn under management, is buying Scottish Widows Investment Partnership from Lloyds Banking Group in a share deal that will see Lloyds take a 9.9% stake.

In addition to the £550m payment there will be a performance-related five-year earn-out payment of up to £100m, dependent on growth. SWIP manages £136bn of assets, £8bn in property, and has annual revenue of £234m.

The properties SWIP manages are mainly in the UK, but it makes some international investments for UK-based clients – SWIP’s With Profits Fund invested in the US via a joint venture.

The division set up the European Balanced Property Fund and, more recently, in 2011, the Pan-European Urban Retail Fund, the first new SWIP property product since 2004. Together they have assets of around £350m.

Aberdeen’s UK business is relatively small; two of its UK segregated mandates are Tyne and Wear pension fund and Windsor Life.

Most of Aberdeen’s managed assets are on the Continent, where it is strong in the Nordics. It also has an Asian presence and funds, plus a £2bn multi-manager business.

Vanhanen joined Aberdeen in 2002 as managing director in Finland, as the company expanded in Scandinavia.

The takeover deal includes an eight-year contract for Aberdeen to provide investment management services to Lloyds insurance companies.

SWIP Property Trust is jewel in the crown for Aberdeen

Chaplin: The SWIP Property Trust was a “particularly attractive part of the deal”
Chaplin: The SWIP Property Trust was a “particularly attractive part of the deal”

SWIP Property Trust, the £2.4bn daily priced, open-ended UK fund managed by Gerry Ferguson, is one of the big attractions of the merger for Aberdeen.

Chaplin said the fund was “a particularly attractive part of the deal, filling a gap in our product range. It is a vehicle we are optimistic about growing.”

Well over half of SWIP’s managed assets are for in-house funds. On the Scottish Widows insurance group side they include the Scottish Widows

With Profits Fund and the SW Unit Life pension and assurance funds, run by Darryl Tidd and Cameron Murray.

The Lloyds mandates include the Lloyds Pension Fund, the Clerical Medical With Profits Fund and the Halifax Unit Linked Life Fund.

One rival fund manager said: “This looks like a good deal for Aberdeen’s property division, but SWIP has a lot of low-fee assets under management.”

SWIP’s flagship institutional, higher-fee generating fund is the Airport Industrial Property Unit Trust, managed by Nick Ireland.

The European business is headed by Robert Matthews.

 

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