ABRDN plc today announced that its U.S. subsidiary abrdn Inc. has entered into an agreement to acquire the healthcare fund management capabilities of Tekla Capital Management LLC (Tekla), a global specialist healthcare investment adviser based in Boston, Massachusetts. The deal includes four NYSE listed healthcare and biotech thematic closed-end funds, totalling £2.6bn in assets under management (AUM), with £26m revenues in 2022.
As part of the deal, Tekla’s investment team will also be joining abrdn. With an impressive track record of over 20 years investing in the healthcare sector, the move will allow abrdn to draw on their expertise as it looks to build out its offering in this area.
The transaction will also further strengthen abrdn’s closed-end fund business, where it currently manages £24.2bn in AUM in US and UK listed closed-end funds, making abrdn the third largest closed-end fund manager in the world.
Stephen Bird, Chief Executive Officer, abrdn, said: “We have been clear that we will continue to invest in opportunities where we see capabilities that we need and that offer compelling value, and this acquisition strongly meets our criteria. Tekla is a leader in a field that offers compelling long term growth prospects, supported by demographic trends and the growing role of technology in healthcare.
With £2.6bn AUM, resilient revenue dynamics, and deep expertise in a market with attractive structural drivers, this deal represents another important step forward for our Investments business.”
The transaction provides key benefits to abrdn
- Enables abrdn to establish a firm-wide center of excellence for the healthcare and biotech sector within its developed markets business.
- Accelerates abrdn’s strategic focus on specialist active management and thematic sectors underpinned by long term megatrends, especially the landscape for advances in biotech which is well positioned for expansion and growth.
- Integrates the investment expertise of the Tekla team, which has deep knowledge and specialisation that can generate insights across the business and drive growth through the development of thematic products in healthcare and biotech.
- Offers a unique platform to deliver solutions and opportunities for clients.
A leader in closed-end funds
A key attraction of closed-end funds are the perpetual capital they bring into the business, generating typically higher margins.
This transaction further builds on abrdn’s recent acquisition of five closed-end funds from Macquarie Asset Management, four of which were merged into three existing abrdn funds. abrdn will transition the management of the fifth fund, Delaware National Municipal Income Fund, on 7 July 2023.
Stephen Bird added: “Listed closed-end funds have been an area of real strength for abrdn over many years. Now the world’s third largest closed-end fund manager, we have successfully executed more listed closed end fund acquisitions than any other investment manager over the last 15 years, and this deal further cements our leading position in this space.”
Pending approval by each Tekla fund’s Board of Trustees and shareholders and the satisfaction of certain regulatory approvals and closing conditions, the transaction announced today is expected to close during the second half of 2023.
