Assets slip but Aberdeen 'well placed' says Gilbert

Published on Thursday 22 January 2009 20:40

ABERDEEN Asset Management is "well placed" to meet this year's challenges, according to its chief executive, who yesterday reported a slight dip in assets under management.

Britain's largest listed fund manager said its assets under management stood at 110.2 billion on 31 December, down from 111.1bn on 30 September.

The City reacted favourably to the trading update, with shares in Aberdeen Asset Management closing up 2.6 per cent or 3p at 119p. Shares had risen as high as 124.5p in early trading, before falling back slightly.

Chief executive Martin Gilbert said AAM's first quarter performance – the firm's financial year begins on 1 October – was "resilient".

"The fact that our assets under management have remained broadly the same since the end of September is a tribute to the diversity and scale of the business," Gilbert said.

"Market conditions remain extremely challenging but AAM is well placed to come through these times in good shape and to continue to take advantage of opportunities as they arise."

AAM reported that net outflows from its funds had been largely offset by the performance of its investments and by currency movements.

Net withdrawals by clients in the quarter reached 5bn, compared with net inflows of 100 million in the same period last year, although net inflows were reported in AAM's equities and property.

Gilbert said plans to buy Credit Suisse's asset management business – which were revealed on Hogmanay – were "progressing well".

He added that cost-cutting measures were going according to plan.

AAM completed the sale of its Belgian property business in November, which resulted in a 1.2bn decrease in assets under management. In December, AAM had announced that it would seek an additional 20m in savings on top of the 5m it announced in July.

Bill Rattray, AAM's financial director, told The Scotsman: "The cost-cutting is spread over quite a wide area. For example, we achieved a reduction of close to 200 people in the property division – not by redundancies but by outsourcing the operation to a third party."

He explained that AAM staff in Scandinavia had transferred to an outside company.

Asked if there were plans for further acquisitions following the Credit Suisse deal, Rattray added: "We don't set out with a shopping list – we tend to look at opportunities that might arise from time to time.

"We certainly are continuing to look at opportunities."

Evolution Securities raised its rating on AAM's shares from "sell" to "reduce", citing Aberdeen's defensive characteristics.

But the broker said there was "substantial risk" in the firm's deal with Credit Suisse, in which AAM bought the Swiss bank's asset management arm in return for a 25 per cent equity stake.