Spanish bank Santander’s asset management arm is one of the parties interested in buying Abrdn’s private equity division, according to Sky News.

A deal could be made in the next couple of months that could value the unit, which manages Abrdn Private Equity Opportunities (APEO ), at around £250m.

At least one other party has been in discussions in recent weeks to buy the £14bn private equity business, Sky News reported.

The news that Abrdn (ABDN) had put up its private equity business for sale was first reported in July when investment bankers at Rothschild were appointed to find a buyer. The sale is part of Abrdn CEO Stephen Bird’s efforts to streamline the business.

Although the asset manager, which has previously declined to comment on the reports of a sale, is to offload its private equity business, it publicly remains committed to private markets.

In an interview with Citywire Amplify last month, Abrdn’s global head of real assets and private credit investment specialists Neil Meikle said private credit and real assets are a key strategic growth priority for the business.

Abrdn had £2.9bn in private credit assets at the end of June and £42.7bn in real assets. Overall, its alternatives business has about £80bn.

Abrdn, which has around £508bn in assets under management in total, launched a dedicated private markets arm in September 2019 and restructured the leadership team.

Bird became CEO of the business in September 2020 and has been working on simplifying the company. 

APEO investment trust is run by Alan Gauld who oversees £1.1bn of stakes in third-party private equity funds, or limited partnerships, and co-investments in unquoted companies with external fund managers.

Over 10 years, its total shareholder return of 232% has trounced the UK stock market return of 85%. However, in common with other London-listed private equity funds, its shares have de-rated in the past year on concerns that valuations of unquoted companies will be cut in a recession.

That has left the shares on a steep 39% discount to their net asset value, which most analysts believe is excessive. With the bulk of the portfolio valued at 30 September 2022, investors are awaiting updates in the next few months to see if the fears are justified.