Half-year progress: Expanding our Alternatives capabilities

Ahead of our Half year results for 2023, we’ve been looking back at the progress we’ve been making against our strategic priorities – Asia, Sustainability, Alternatives and UK savings and wealth. With Alternatives a critical part of our client-led plans, here we highlight some of the key developments delivered so far this year.

Envisioning a digital future

At abrdn, we have a clear vision of a digital future. We recognise that new technologies will change the way we invest, revolutionising the investment landscape and make investing accessible to a broader audience. At the core of this transformation is Distributed Ledger Technology (DLT), an effective method of recording ownership details in a decentralised computer network.   

We believe that, in the next decade, nearly all investments could come to be represented as digital assets using DLT. This advancement could bring numerous advantages, including faster, safer, and more cost-effective ‘on chain’ trading and settlement, enhanced efficiency in private markets, and the fragmentation of assets into less expensive units.

Investing in the future, today

To prepare for the future, we’re focusing on the following three key areas:

1. Developing investment products that offer exposure to future technologies.
2. Utilising these new technologies to enhance investor access to our existing products.
3. Making strategic investments in the new DLT-powered market infrastructure.

Our digital conviction

As a forward-thinking investment company, we are committed to redefining the industry’s standards. For example:

• Archax – We’re the largest external shareholder in the UK’s first regulated digital securities exchange. Archax allows institutional investors to access blockchain-based digital assets and acts as a bridge to the traditional capital . Building on our investment in Archax, great progress has been made towards creating tokenised representations of our funds. This work leverages Archax’s recently announced Tokenisation Engine and represents the first step towards a number of traditional, real world tokenisation projects that we are working on together.
• Hedera – We’re the first asset manager to join the governing council of this cutting-edge DLT firm. Hedera pioneer enterprise-grade technology, enabling the seamless migration of traditional investments onto the DLT. Hedera’s technology is playing an important role in our tokenisation and digitisation journey. As such, we felt it was important to have a governance role in the business and our on-premises node is now live, helping to operate the network.

Duncan Moir, Senior Investment Manager, comments on our progress in this area: “Blockchain technologies are inevitably going to form a big part of the future of financial markets. The progress we’ve made so far in this area throughout 2023 will set us in good stead to develop our capabilities in this area for years to come."

Venturing into healthcare and biotech

In addition to our focus on new technologies in the Alternatives space, we announced our intention to establish abrdn as a centre of excellence for healthcare and biotech investing with the acquisition of Tekla Capital Management LCC’s (Tekla) healthcare fund management capabilities.

As part of this venture, Tekla’s specialist investment team will be joining abrdn, bringing with them a remarkable track record of over 20 years in the healthcare sector. Their expertise will bolster our efforts as we expand our offering in this area.

This pivotal strategic step reinforces our commitment to specialist active management and thematic sectors, grounded in long-term megatrends.

Companies selected for illustrative purposes only to demonstrate the investment management style described herein and not as an investment recommendation or indication of future performance.