NEW YORK, Oct 16 (Reuters) – Abrdn (ABDN.L) said on Monday it had agreed to sell its $9 billion European-headquartered private equity business to Brazilian firm Patria Investments (PAX.O), as it seeks to boost returns by offloading non-core assets.
For Patria, the acquisition of abrdn’s fund of funds meets its goal of expanding more internationally after a listing on Nasdaq in 2021.
The British fund manager said Patria would pay 60 million pounds ($73 million) in cash upfront, with a further payment of 20 million pounds plus interest due two years after completion.
A final 20 million pounds would be paid after three years, subject to the performance of the business, abrdn said.
“We are continuing to reduce complexity and are focusing on areas where we are confident we can drive growth in the future,” abrdn CEO Stephen Bird said.
The sale is expected to complete in the first half of 2024.
In July, abrdn announced the sale of the U.S.-headquartered part of its private equity business to HighVista Strategies.
GLOBAL EXPANSION
Shares in Patria were up 1.3% following the deal’s announcement.
Patria’s Chief Executive Officer Alexandre Saigh told Reuters the acquired platform would expand the firm’s offerings for Latin American clients, who have been seeking to increase exposure to private equity outside the region. Abrdn offers investors funds of funds from different firms, mainly in Europe.
At the same time, Patria will be able to offer its Latin America funds to existing abrdn’s clients. Only 9-10% of Patria’s client base is from Europe.
Currently, the Brazilian firm mainly manages private equity, real estate, and credit assets in Latin America for investors outside the region. Still, it also offers third-party private market products to clients in the region interested in investing outside Latam, totaling $1.3 billion in assets.
As part of a newly launched Global Private Markets Solutions platform, Saigh said Patria is considering adding global funds of funds in real estate and credit in the future.
“This is a very interesting business. I want to provide my clients what they want, I don’t want them to go somewhere else,” said Saigh, adding Patria may consider further acquisitions in the U.S. and Asia in the future.
