In an announcement to the Stock Exchange on 5 September, Edinburgh Fund Managers announced that their Board had recommended a takeover by Aberdeen Asset Management. Aberdeen Asset Management has then agreed to sell Edinburgh Fund Managers retail OEICs, Unit Trusts and Fund of Funds mandates to New Star Asset Management. The deals are subject to Edinburgh shareholders' agreement and agreement from the regulatory bodies. If all of this is approved, it should all be done by the end of the year. In Edinburgh's announcement to us, the managing director for intermediary sales said that Edinburgh believe the sale arrangement will be of benefit to all Edinburgh clients.
Our View:
Basically, Aberdeen will be taking over Edinburgh. Aberdeen will then sell the retail part of Edinburgh to New Star. Aberdeen will retain the institutional side. Once the sale has completed, clients will contact New Star with enquiries, not Edinburgh. However, Edinburgh Fund Managers will continue to administer their funds for around six months. New Star will then take over the responsibility. Edinburgh Fund Managers has been in the news constantly over the past few years and we believe that the Board has taken the decision to protect their investors. New Star was launched only 2 years ago but is already one of the 20 largest retail fund managers in the UK. They have built their own reputation and track record and seem to be committed to Edinburgh's investors. One piece of good news is that New Star has confirmed that the Edinburgh Portfolio will continue to be managed by the current people (who have agreed to join New Star) and that the investment process will remain the same. This should give confidence to existing investors.