abrdn to acquire US specialist healthcare closed-end funds with £2.6bn AUM
21 June 2023abrdn 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[1]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[2] in AUM in US and UK listed closed-end funds, making abrdn the third largest closed-end fund manager in the world.
Stephen Bird, abrdn CEO, 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.
[1] As of 31 December 2022
[2]As of 24 January 2023
Ends
Notes to editors
1. Healthcare as an asset class in in the US:
- US healthcare expenditure per capita has grown at a compound annual rate of 6% since the 1980’s
- Aging populations combined with increased instances of obesity, diabetes and cancer are expected to further drive demand in the healthcare sector
- Over the long term, healthcare consistently outperformed broad debt and equity indices
- All subsectors of healthcare have benefitted from recent research and innovation, with demographic change accelerating technological advancement in the space
2. The names of the four NYSE listed funds are;
Tekla Healthcare Investors (HQH)
Tekla Life Sciences Investors (HQL)
Tekla Healthcare Opportunities Fund (THQ)
Tekla World Healthcare Fund (THW)
More information can be found at www.teklacap.com
All media enquiries to Duncan Young on 07920 868865 or email press.office@abrdn.com
About abrdn
- abrdn is a global investment company that helps clients and customers plan, save and invest for the future. Our purpose is to enable our clients to be better investors.
- abrdn manages and administers £500bn of assets for clients (as at 31 December 2022).
- Our strategy is to deliver client-led growth. We are structured around three businesses – Investments, Adviser and Personal – focused on their changing needs.
- The capabilities in our Investments business are built on the strength of our insight – generated from wide-ranging research, worldwide investment expertise and local market knowledge.
- Our teams collaborate across regions, asset classes and specialisms, connecting diverse perspectives and working with clients to identify investment opportunities that suit their needs.
- As at 31 December 2022, our Investments business manages £376bn on behalf of clients - including insurance companies, sovereign wealth funds, independent wealth managers, pension funds, platforms, banks and family offices.
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