Hedge Fund Reader : Another Asset Management Company in Scotland to launch a Hedge Fund

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October 01, 2005

Another Asset Management Company in Scotland to launch a Hedge Fund

Aberdeen Asset Management Plc (AAM) is the new entrant in setting up a hedge fund operations. AAM follows a herd mentality where Asset Management companies are in a mad rush to start of hedge fund operations to grab a share of the ever booming $1 trillion industry. Legg Mason Inc. bought Permal Group, a hedge fund for as much as $1.39 billion in June this year, followed AAM’s Scottish rival Britannic Asset Management hired two managers last week to commence hedge funds operations. AAM is now in a better position after the acquisition of Deutsche Asset Management's U.K. operations along with a majority of its analysts for approximately £265 million. AAM has also manages Aberdeen Far East Emerging Economies fund which was launched 13 years back and have clocked a return of 28 per cent for the year. However, AAM has had a chequered past. In April 2003 it faced the Financial Services Authority investigation into the sale of split-capital trusts and had to reimburse small investors as much as £78.3 million ($138.5 million) and sold its mutual fund business, since they were selling products that people don't understand and were not suitable for the real market economy. Bloomberg.com Reports:

Aberdeen Asset Management Plc is considering selling hedge funds after taking on more clients and doubling assets with the purchase of Deutsche Asset Management's U.K. business, Chief Executive Officer Martin Gilbert said. For Aberdeen, the investments would complete a shift to institutions and wealthier clients and away from U.K. individual investors. Hedge funds, which tend to be more risky than mutual funds because they bet on falling as well as rising securities, target people with at least $1 million to invest.