Aberdeen shares slump as outflows continue

Added 3rd May 2016

Shares in Aberdeen asset management fell almost 10% as Aberdeen’s chairman, Roger Cormick, admitted it “remains vulnerable to further outflows over the next few quarters.”

Aberdeen shares slump as outflows continue


In spite of new management appointments and attempts to diversify its portfolio in the alternative assets and technology spaces, Aberdeen Asset Management (AAM) reported a net outflow of £16.7bn over the past six months.

While AAM’s interim report revealed that net outflows in the equities arena had slowed quarter to quarter, the £14.9bn in outflows in the six months leading up to 31 March 2016 was still significant. At a net level, this translated into total net outflows of £9.8bn.

But, there was a decrease in its net outflows from its Asia Pacific from £1.8bn to £1.4bn, while global emerging markets equities offerings rose from a net outflow of £929m to a net inflow of £66m between the final quarter of 2015 and the first quarter of 2016.

European equities saw an increase in net outflows from £33m to £43m, while UK products saw a much more significant jump in net outflows from £22m to £132m quarter to quarter. 

The net outflows from AAM’s emerging markets fixed income business saw the most dramatic change from the final quarter of 2015, leaping from £355m to £1,126m by March 2016, bringing net outflows in the first quarter of 2016 to £895m. 

For the firm's fixed income offerings in total, net outflows were £2.6bn in the first quarter. 

AAM said that it remains susceptible to future outflows “as clients continue to react to the difficult conditions for performance over the last few years.”

The weakness in emerging markets was singled out as the main culprit behind the higher net outflow figures, “exacerbated by the effects of falling oil and commodity prices,” Cormick noted.  

AAM reported that its assets under management (AUM) had increased since 30 September 2015 from £287.3bn to £292.8bn. The investment management company said this 3% increase is thanks to several notable corporate transactions completed within the period, including the purchase of hedge fund solutions firm, Arden, in December 2015, which generated a net £7.8bn worth of assets.  

However, these figures still pale in comparison to its reported £330.6bn AUM in March 2015.

Similarly, net revenue fell by 20% to £483.6 million from £605.2m in March 20165. Underlying profit before tax was 40% lower than it was the same time last year.    

AAM’s share price is down 9.61% following the release of its interim results on Tuesday morning. 

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