Aberdeen Asset Management’s proposed Scottish acquisition to have no impact on its Islamic business - IFN

Aberdeen Asset Management’s proposed Scottish acquisition to have no impact on its Islamic business

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GLOBAL: There has been recent conjecture in the market that Aberdeen Asset Management (Aberdeen) is in discussions for a potential acquisition of Scottish Widows Investment Partnership (SWIP), which is part of the Lloyds Banking Group (Lloyds). The UK-based wealth management firm confirmed that it is looking to negotiate a deal for SWIP in a statement yesterday, adding that Aberdeen is also considering the formation of a strategic partnership with Lloyds. Should the transaction take place, it would be funded through the issuance of new shares in the company to Lloyds in addition to deferred payments in cash, conditional on the performance of the partnership over an unspecified period. Speaking exclusively to Islamic Finance news, Gerald Ambrose, managing director of Aberdeen Islamic Asset Management (AIAMSB), a wholly-owned subsidiary of Aberdeen Group, however said that the acquisition would not have any effect on its Islamic funds due to the conventional nature of the endeavour. Bharat Shah Joshi, assistant investment manager at AIAMSB further added that the investments would primarily be focused on Europe and the US. Ambrose’s outlook on the European market is positive, saying that the market is currently underrated. He elucidates that there are a number of listed companies which are performing above par, and are currently reigning in high earnings per share ratios. Describing the Shariah compliant asset management sector in Europe and the UK as a relatively “young industry”, he explained that while there is demand for Islamic investments in the region, the main challenge is identifying the right channels for these investments. At present, AIAMSB has two Shariah compliant equity funds with approximately RM1.2 billion (US$379.54 million) worth of assets under management. Bharat also noted that the company is looking to expand to the Middle East within the next three to five years, and is currently building its track record in the Islamic asset management space.